The game is a fantasy game yes, that doesn't mean that you can't be realistic with alot of things. People have opinions about breast size and physics that make the game more realistic. Would you rather see the word "parry" or would you rather see your character actually parry with animation or both? it's all a matter of opinion and it's my opinion that losing experience isn't the best or most realistic way to penalize death. I don't see alot of people quoting actual character death and mandatory deletion comments.
All in all to me, gear damage represents a failure to block, parry dodge successfully enough to prevent death thus damaging your gear and thus giving crafts something meaningful to do besides grinding out endless things to level or make gil. This again is just a matter of opinion though, I respect everyone's opinion.
