I know in reef tanks a deep sand bed (3"+) allows bacteria to turn nitrate into N2 gass.  With the low bio-load of a reef tank, this is quite usefull.  In a marine ornamental fish hatchery, would it be usefull at all?  The feeding levels are so different than a reef tank.

I would forgo the DSB in a hatchery. Maintenance will be significantly easier with bare bottom tanks. That is how every hatchery I have seen operates. Plus, nitrates are not problematic for fishes until they get exceptionally high.