I'm all for a real death penalty. As a veteran XI player I can't say I loved it all the time, though. lol Sometimes I was close to bite into my keyboard. Good times~ lol
But XIV as it is now is

a) way too easy

b) offers almost no incentive to play thoughtfully.

While I'm not quite sure I'd like to see de-lvling return, I'd love to see something along the lines of gear damage upon death or a EXP loss without a level down above my head. Basically anything that stops a player from trying a certain boss like ten times in a row within say five minutes.

Random note:
Demon's Souls/ Dark Souls FTW! (The last boss was so unbelievably easy lol)