Yes, I think it is okay to omit verses, as long as the story (if there is one) told in the song is clear. Many traditional ballads are so long that they would drag on for many minutes if you sang all the verses. That might be okay in a room full of ballad enthusiasts, but not okay in other settings where the audience had a shorter attention span.   There are some verses in songs which I just don't like very much so I omit them. Casting around for an example - OK Star of the County Down:

I've traveled a bit, but never was hit
Since my roving career began;
But fair and square I surrendered there
To the charms of young Rose McCann.
I'd a heart to let and no tenant yet
Did I meet with in shawl or gown,
But in she went and I asked no rent
From the Star of the County Down.

I just don't think the words flow very well and frankly I don't care for such lines as "I'd a heart to let and no tenant yet." So I don't sing that one. And there's a verse in "The Flower of Magherally" that says something about the Grand Tisrok Ali or some such nonsense and I don't sing that one either.

I think it's up to the performer.