I'm glad most of you are talking about sound quality rather than arguing about no sound in space.
But to those people who are pointing out there is no sound in space. Explosions are actually one of the few things you can hear in space. Due to explosives being... well explosive, there is a large shockwave of gas and other particles that radiates from the explosion, and when that gas hits your ship you get sound.
Granted explosions will sound different in space and won't be heard through objects the same way. But they will generate sound for nearby observers.
As you point out (and it seems I was not clear enough), there is sound in space, the problem is that there is not enough of a medium to transport that sound (gases, liquid or solid objects).
Some of the medium that transport the sound of the explosion is expelled by the doomed ship along with debris. However, if you aren't very close, then the quickly expanding ball of gas will lose much of its sound conducting power, as the individual gas molecules move apart further and further. So, in 10 to maybe a hundred meters you might have some sound transmitted through your hull, further out it might not be even noticable anymore.
What should also be considered is, that the only thing that there is always only a limited amount of gases in the destroyed ship and that the explosion force most likely will not even form a regular globe, as the gas, and therefore the explosion, can only exit at the points where the hull breaks. If those breaks point away from your ship, you wouldn't be able to hear any explosion.
There is, however, another thing to consider, your shield. If it is up, the gases expelled by the explosion would impact on it first, so no sound would be transmitted to your ships hull, therefore no sound. Only if your shields are down, would the gases impact on the hull and be able to transmit some force onto it, creating some sound, though very likely inaudible over all the other sounds of your ship, unless you were really close to the source.
What would create more of an effect, would be small debris flying towards you, though, again the shield would first act as a barrier and you'd only have the visual effect of something impacting on the shield. Only if it is down, would debris impact on your hull and create a sound.
So, yeah, there is sound in space, just not enough sound conducting material and explosions lose a lot of their force very quickly in space as there is nothing they will have to push against (like an atmosphere), meaning you'd have to be in the explosion to hear it and you don't want to be there.
However, from a gameplay perspective I do understand the need for explosion sounds, even though someone in this thread mentioned that realistic depiction of certain elements is no fun, that is only partially true, as there are quite a lot of people that do like simulations.
