Providing crew escape for all phases of flight of the Space Shuttle, given its design architecture, was simply not practical. Keep in mind you have up to 7 crew members on two decks. Keep in mind that the flight regime consists of large ranges of altitude and velocities. Keep in mind that it would have to cover launch, landing, and several abort modes. Even the ejection seats used in the early flights couldn't cover the entire flight regime and only worked for the Commander and the Pilot.
So to answer your question directly: ejection seats would have only been useful for the crew on the flight deck and then only for a (very) limited part of the total flight regime.
Regarding the use of a LES on the Shuttle: There were some studies done during early design phases of a separable crew compartment. Not surprisingly, this added an unacceptable amount of mass to the Orbiter -- at least with the architecture selected. Of course, this system looked nothing like the LES used on Apollo. Also, even the LES on Apollo didn't cover all of Apollo's flight regime.
Another interesting fact: the Shuttle was initially designed to allow a shirt-sleeve environment for the astronauts. This means that prior to STS-26, Shuttle astronauts didn't even wear parachutes (excepting the early qualification flights with ejection seats). In fact, the seats were not designed to handle astronauts with a parachute. By "handle," I mean handle the additional weight and volume of a crew member with a parachute and other gear attached. The seats were modified (and eventually entirely redesigned) for STS-26 and beyond for when the crew members did wear parachutes.
These new chutes were expected to be used for a very limited range of flight regimes/abort modes where the Orbiter could be put into a stable glide configuration that allowed all of the crew to bail out. This means that you had to ride the solids for at least 2 minutes till they burned out, do some fancy flying to get rid of the External Tank, get the Orbiter into a stable auto-piloted glide, climb down (or over) to the hatch, blow the hatch, extend a pole (see next paragraph), and bail out (x7). So this really wasn't a launch escape system -- once you light the SRBs, you are committed to at least 2 minutes of powered flight.
Bailing out was to be done with the aid of a crew escape pole. The pole kept the crew from hitting the leading edge of the wing. There is some good test footage available here: http://youtu.be/dfVTX25hH-I. Note that none of this would have helped the astronauts we lost on 51-L or STS-107.
So what is the take-away here? One (of many) of the big reasons the Shuttle was retired was its lack of provision for crew escape. All of the likely new manned US systems (government contracted and private) include crew escape for most if not all of the flight regime. This is one of the reason why most of these systems go with capsules too.