Both are unrealistic, but here's the rub; would you rather regen/gain bars or get shot up and have to run to a hospital before you die? In some cases, you could be making so many trips, it would be annoying as hell.
There is an MMO [Perfect World International] that when your life/mana goes down, if you don't have the potions to replenish yourself, you have to sit your character out of action FOR A VERY LONG TIME. Seriously, I'm a level 36 blademaster, and if I spend all my mana and almost die, resting at my level takes up to 8-10 minutes for everything to come back. It's crazy. I rarely play that particular game anymore.
A game a friend of mine and I wish someone would come out with is a game that would delete your character permanently if you did too many stupid things to get yourself killed within a short amount of time. On your fourth trip to the hospital, if you tried to leave, the nurses and doctors would try to stop you, and if they overpowered you, you got sedated and couldn't play that character until you were fully healed. If you made it past them and got yourself killed without having fully rested and repaired yourself, the game would tell you that your characters' injuries were too severe to survive, and he/she has died.
It sounds rather mean-spirited on the surface, but I've played so many MMO's where some retard aggroed everything and got himself and others killed, that I think a little 'divine retribution' is in order.