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In stv elections, seats can be lost by not running the right number of candidates. For example, the Labour party could have won 3 extra seats in 1992, by running second candidates in Dublin North, Dublin South or Dublin South-Central. Normally, however, problems are caused by running too many candidates.
A good example of this from the 1997 election is Dublin North-West, where Fine Gael lost a seat by running 2 candidates in a constituency where they had a sitting TD, Mary Flaherty, but had virtually no chance of a second seat. (In the 1992 election, Fine Gael had obtained just 12.33% of the vote, and Mary Flaherty had been the fourth and last candidate elected, still over 1,000 votes short of the quota).
In 1997 Fine Gael ran 2 candidates, Brendan Brady and Mary Flaherty, and increased their share of first preferences from 12.33% to 15.6%. However, this was still significantly short of the quota. Also, both candidates were very close together on the first count. This would be a good thing if there was any possibility of winning 2 seats, but it is the worst possible scenario where a party is only trying to win one seat, because it means that when one candidate is eliminated there will be the maximum possible dispersal of the vote to other candidates.
The following image shows what happened when Mary Flaherty was eliminated. Although Brendan Brady picked up the largest share of her transfers, Proinsias De Rossa received enough to stay ahead. Democratic Left with 10.08% of the vote in the first count won a seat while Fine Gael with 15.60% got none.
This image was taken by using the Mode/Horizontal menu option and then pressing Zap!
Having said that, while running 2 candidates may not make sense from a mathematical point of view, the fact that Fine Gael consistently nominates more than a single candidate may make it a more attractive party for people to join, in that ambitious candidates may can always hope for a chance to run for the Dail - something that might not be possible in the Labour party.