Every time I see someone go 'DEATH PENALTIES SHOULD BE DRASTIC AND HARDCORE!' I see someone who has probably never done end game content, has no desire to do end game content, and has no desire to encourage progression. Yes, let's wipe on endgame content, lose a level, because a single attempt on end-game content is exactly what people want!
See, here's the crux of it... the less an MMO makes you realise you're wasting your time, the more you actually pay attention to the good stuff in the game that makes you want to keep playing.
Firstly, you died. That IS a punishment. You have to restart what you were doing, either by walking back to where you died (which takes time), or by spiritually floating back to where you died (which takes time.) Point is, both things are time-sinks. You died, so now you're not allowed to play, or worse, have to work your way back to get to where you were. That IS punishment. Death is discouraged, because it stops you from being able to play for a bit. That IS a punishment.
Some games just charge you some cash or resource, like gold or, repair bills (also gold) or whatever. That's fine. You can keep playing, but you'll have to give up something for your death. Other games make your items go away completely, or worse, cause you to backtrack in your levelling or progression. This is BAD. You've not only punished the player by causing him to stop playing... you've now FORCED him to play strictly for the purpose of catching up to where he was before...
...in a sense, the punishment for failing your content is to force the player to quit, or keep playing your content; PLAYING YOUR GAME is a punishment. Now, I dunno about you, but unless I'm a Dominatrix, my product should not be seen as a punishment for failure.
It all comes down to the difference between challenge, and punishment. Challenge is when you create scenarios that are difficult to overcome. Punishment is when you create scenarios that, if not overcome, are negative to the player's experience. The two are not the same.
The difference between the two is why WoW beat EverQuest. WoW decided to persue challenge;
WoW: You have to attack the boss, while avoiding fire appearing beneath you sporadically, and occasionally destroying this one specific add that if not destroyed, explodes and heavily damages or wipes your team. Meanwhile, you have to manage your spells correctly, knowing when to do each one optimally, so that you can eke out the best damage in the shortest amount of time. If you fail, you fail the encounter, but you get back up, drink your water, eat your food, and try again. This is an example of challenge. You're doing a lot of different things, and you can actually get better at those things. Skill is important here, and rewarded.
EQ: You have to attack the boss using one ability over and over again, when it is off cooldown. There might be adds. Occasionally you'll get knocked around a bit, just run back and keep going. If your tank and healer aren't up to snuff, you die, and have to grind back all those experience points just to get back where you were. Meanwhile, some other group just killed your boss, meaning you won't have another attempt until next week... if you're the first to the spawn. This is an example of punishment. Skill is not actually tested here, or if it is, is at a rudimentary level. Higher levels of skill and sophistication might exist, but they cannot be practiced or tested, because higher challenges will actually cause you to lose ground, and even regress. One might lie to themselves and think 'Hey, Risk/Reward! More risk!' except that there is no commenserate reward to offset the risk taken. You lose more, but you do not gain what you lose back.
At the end of the day, they're making a game. They want to make a game people want to play not a game people want to work. MMO players want to be challenged, not beaten down like submissive slavebitches. Even Demon's Souls didn't steal progress you've already made.
See, here's the crux of it... the less an MMO makes you realise you're wasting your time, the more you actually pay attention to the good stuff in the game that makes you want to keep playing.
Firstly, you died. That IS a punishment. You have to restart what you were doing, either by walking back to where you died (which takes time), or by spiritually floating back to where you died (which takes time.) Point is, both things are time-sinks. You died, so now you're not allowed to play, or worse, have to work your way back to get to where you were. That IS punishment. Death is discouraged, because it stops you from being able to play for a bit. That IS a punishment.
Some games just charge you some cash or resource, like gold or, repair bills (also gold) or whatever. That's fine. You can keep playing, but you'll have to give up something for your death. Other games make your items go away completely, or worse, cause you to backtrack in your levelling or progression. This is BAD. You've not only punished the player by causing him to stop playing... you've now FORCED him to play strictly for the purpose of catching up to where he was before...
...in a sense, the punishment for failing your content is to force the player to quit, or keep playing your content; PLAYING YOUR GAME is a punishment. Now, I dunno about you, but unless I'm a Dominatrix, my product should not be seen as a punishment for failure.
It all comes down to the difference between challenge, and punishment. Challenge is when you create scenarios that are difficult to overcome. Punishment is when you create scenarios that, if not overcome, are negative to the player's experience. The two are not the same.
The difference between the two is why WoW beat EverQuest. WoW decided to persue challenge;
WoW: You have to attack the boss, while avoiding fire appearing beneath you sporadically, and occasionally destroying this one specific add that if not destroyed, explodes and heavily damages or wipes your team. Meanwhile, you have to manage your spells correctly, knowing when to do each one optimally, so that you can eke out the best damage in the shortest amount of time. If you fail, you fail the encounter, but you get back up, drink your water, eat your food, and try again. This is an example of challenge. You're doing a lot of different things, and you can actually get better at those things. Skill is important here, and rewarded.
EQ: You have to attack the boss using one ability over and over again, when it is off cooldown. There might be adds. Occasionally you'll get knocked around a bit, just run back and keep going. If your tank and healer aren't up to snuff, you die, and have to grind back all those experience points just to get back where you were. Meanwhile, some other group just killed your boss, meaning you won't have another attempt until next week... if you're the first to the spawn. This is an example of punishment. Skill is not actually tested here, or if it is, is at a rudimentary level. Higher levels of skill and sophistication might exist, but they cannot be practiced or tested, because higher challenges will actually cause you to lose ground, and even regress. One might lie to themselves and think 'Hey, Risk/Reward! More risk!' except that there is no commenserate reward to offset the risk taken. You lose more, but you do not gain what you lose back.
At the end of the day, they're making a game. They want to make a game people want to play not a game people want to work. MMO players want to be challenged, not beaten down like submissive slavebitches. Even Demon's Souls didn't steal progress you've already made.