People could have opted for indefinite life-span if they so chose: http://en.wikipedia.org/wiki/The_Culture#Death
They had lots of children, overpopulation was not a problem because of huge habitats that hosted billions of individuals (and that were built with relative ease - The Player of Games). Also I don't agree with the intellectual degradation argument, it's just silly in the Culture AGI context.
Whatever the value of life I think it's best for the individual to decide what to do with it. Most would probably euthanasiate after a while anyway. I would very much prefer suicide than a random age related problem, but I don't really have a choice do I?