In the $0$-Extension problem, we are given an edge-weighted graph $G=(V,E,c)$, a set $T\subseteq V$ of its vertices called terminals, and a semi-metric $D$ over $T$, and the goal is to find an assignment $f$ of each non-terminal vertex to a terminal, minimizing the sum, over all edges $(u,v)\in E$, the product of the edge weight $c(u,v)$ and the distance $D(f(u),f(v))$ between the terminals that $u,v$ are mapped to. Current best approximation algorithms on $0$-Extension are based on rounding a linear programming relaxation called the \emph{semi-metric LP relaxation}. The integrality gap of this LP, with best upper bound $O(\log |T|/\log\log |T|)$ and best lower bound $Ω((\log |T|)^{2/3})$, has been shown to be closely related to the best quality of cut and flow vertex sparsifiers. We study a variant of the $0$-Extension problem where Steiner vertices are allowed. Specifically, we focus on the integrality gap of the same semi-metric LP relaxation to this new problem. Following from previous work, this new integrality gap turns out to be closely related to the quality achievable by cut/flow vertex sparsifiers with Steiner nodes, a major open problem in graph compression. Our main result is that the new integrality gap stays superconstant $Ω(\log\log |T|)$ even if we allow a super-linear $O(|T|\log^{1-\varepsilon}|T|)$ number of Steiner nodes.