In situations beyond that, you can still fire - you just have to burn through all your shields first. (You get them all back after your shot, natch, assuming you lived.) There's a reason shield quantity is freely adjustable - once one is good enough at the game (or is already a chess grandmaster and isn't about to blunder), shields only get in the way.
With all the abilities/powers in the game, it can be REALLY HARD to determine whether a situation is truly hopeless or if there's a slight chance somewhere; the game ending on you automatically when there WAS a hope would be FAAAAAAR worse than what it does now, which is not even try to figure it out. I don't blame the devs on that one at all. Also, now that Black Mist is a thing, what you choose to do when it is hopeless - your "parting shot", often literal, as it were - actually can matter.
EDIT: You always get back all your lost shields after every single turn you take. Taking a shield AS you take a shot, as you suggest, makes no sense, so maybe that's what you were missing?
