Firstly, look at why genetic diversity is important to a species. When an organism’s environment is unchanging it’s actually not that important. But when an organism’s environment is variable, genetic diversity allows the species as a whole to cope with change, though individuals with the ‘wrong’ genes loose out. If this concept is extended to all species, biodiversity makes the Earth’s biological systems as a whole more robust.
If climate change, for example, knocks out one species of nitrifying bacteria, bacterial genetic diversity will hopefully allow another species to fill its place and keep the nitrogen cycle going happily on its way. Reduce the amount of diversity and you reduce the amount of raw material you have available to compensate for change, to act as a buffer as it were.
Talk of previous mass extinctions as normal is not helpful from a human viewpoint. A collapse of the nitrogen or carbon cycles, for example, would be catastrophic. The reason why this is unlikely to happen is that there is plenty of natural redundancy built in to the system. The redundancy comes from biodiversity, which is really genetic diversity, and genetic diversity is self-promoted by interactions with genetically diverse organisms (and diverse non-organic environments).
