Originally posted by deadshooter:

this affects only durability. For pickaxes uprades are kinda nonsensical, because it's cheaper to get this amount of durability by making a new tool than upgrading to max level.

I assume you play with mods that let you cheat the inventory restrictions?

Originally posted by Rhapsody:

Upgrades for most tools do increase damage dealt to resource nodes. It's especially important for pickaxes, but also for chopping axes. The difference between base iron pickaxe and fully upgraded one is +50% more pickaxe damage, for example. But whether this is worthwhile investment or not depends.

Scrap piles for example have low durability/HP, so fully upgrading iron picks for that purpose would be a waste: It'd be better to get more pickaxes instead. Silver veins, ancient giant armor and swords, and black marble on the other hand are much more durable, but it may be more desirable to move on and progress until you get the blackmetal pick and upgrade that instead.

Like most tools and weapons, pickaxes have cleave penalty, so their damage is reduced when striking multiple chunks/nodes at the same time. Whether or not the pickaxe damage increase (together with your skill level effects) helps depends on how many objects you strike at once.

Adding on to what Rhapsody is saying, remember that when you combine the +50% more PIckaxe Damage, with the Increased Durability, the two effects Feed into one another, greatly increasing the lifespan of your tool.

If you double the durability, but you need 50% fewer strikes to destroy resource nodes, you've effectively Tripled the tool's lifespan.