I believe you are conflating Nitric Oxide (NO) with Nitric Oxide Radicals (NO•). While Nitric Oxide isn't stable in the presence of Oxygen, Nitric Oxide Radical

I believe you are conflating Nitric Oxide (NO) with Nitric Oxide Radicals (NO•). While Nitric Oxide isn't stable in the presence of Oxygen, Nitric Oxide Radicals will react with pretty much any species they come into contact with. From the viewpoint of an organism, they are more useful as a weapon than as any sort of controlled energy source.