Extinction is not limited to species. Species arent really a thing as one eventually transforms into another over near-infinite steps. Only genes/traits matter. Evolution is in fact impossible without the loss of traits between generations. Extinction of traits in favor of better ones is baked in to the very definition.
and yet almost every selection mechanism can only operate on phenotypic forms. The nature of a "species" is a shorthand for "sufficiently distinctive phenotype(s) that evolution will operate distinctly on this group of individuals", and in this sense, "species" do matter.
> Extinction of traits in favor of better ones is baked in to the very definition.
I don't know what definition you're talking about, but this also completely wrong. Evolution can generate new traits without old ones vanishing, and that can be true whether the new ones have higher or lower fitness than the old. Evolution is a change generation mechanism primarily; selection is a secondary mechanism and at various times and places, selection pressure can be extraordinarily weak, allowing a large diversity of traits to coexist.
