N-600 is typically not needed for getting first passport, but very important for the future.
One day the derived citizen can be asked to provide their parent's naturalization certificate, parent's job records, their own school records, bills, bank statements and other documentation proving they were under 18 when parent became a citizen and that's how derived citizen became a citizen. It may be easy now, but imagine 40 years later.
Here's good thread discussing why:
So it's not like only fools pay $1300 for useless paper. It's super valuable.
Also, until derived citizen gets their certificate of citizenship, they are not recorded as citizens in USCIS database. They are recorded as LPRs.