I agree to an extent. It depends how likely permadeath really is. For instance, you could give a character 9 lives, with permadeath occuring after the 9th death, but you could provide a means to 'buy back' a death for some considerable expense (be that in time or in xp/cash). That makes death even more costly, and players even more vary of death.

You might say 'why not just make a death more costly in some other way' which is a fair point.

Of course the by doing that, you have to be even more careful to avoid unreasonable deathtraps. If you don't have a buy back system, you risk player wrath if there is a bug, and you have to think carefully about playtesting players and whether they should have immunity.

With a system like this, any player worth his salt would have virtually no risk of permadeath, so long as they played sensibly, buying back deaths as they occur.

The exception is on a MUD with PK, where a particularly nasty character could pk someone to permadeath.

Hmm I guess I should put a conclusion here: Ok so in conclusion, I generally like the idea, but it's not implemented on Zebedee due to the issues above.