The major problem I see with the balance between the harsh realities of death and the unrealistic popping back up to kill your killer is that it weighs in on Simu's "less tedium" idea.
You can't craft a game around not running around collecting countless herbs, mass manufacturing generic items to sell, and sitting on long flight paths, just to then force the player to sit around for half an hour if they die. Many people can only play an hour a night and while I personally wouldn't mind stiffer penalties, it's because it would only eat a tiny portion of my game play. To some other unfortunate, it would eat half their time.
Now, to look at this whole death thing from another angle:
Of course, it all depends on how much death happens too. In my opinion, if we want a stronger RP system, we shouldn't be talking about what happens when you die, but how to make death a rarer event. I mean, people get knocked out of commission all the time, end up in the hospital in traction and whatnot, but they only die once.
Perhaps, maiming, being knocked unconsious, or other such states of not-quite-death could replace a traditional "oh no I died AGAIN" system.
