There are always outliers, but IMO about 94.55% of the time 550 is overkill. It is heavy and bulky for most of the jobs we use it for. When you have to carry your gear on your back and fit it in a limited space I think there are better options.
Excuse me while I put on my fire resistant internet suit...
No suit needed. I have been phasing out, or at least supplementing, paracord with both woven mason's line and trip tease, both of which are lighter, less bulky, and function quite as well for many purposes.
Any marine supply store will offer many alternative small lines which also give you some nice options. The thing about paracord and other nylon lines is that they are elastic, which is good or bad, depending upon the application. Paracord is not optimum for use as a halyard, for example, where some of the stuff from a marine store would be much better.
The biggest drawback to paracord is the proliferation of cheap, substandard varieties. It also isn't available in hues that color coordinate with the rest of my outfit.. so tacky!!!