Memorializing players who we've lost is something that almost every game community tackles in one way or another. Here in FFXIV we've had memorial walks for some well-loved players, and so on. Most games never really have a formal way to memorialize them, partly because the logistics can be complicated at best. Make an in-game monument memorializing fallen players, which people can get names added to? Now you need someone to review all those submissions and add them. Make it automated? Now you have people who are going to abuse the system to scrawl immature graffiti onto the in-game memorial. (C'mon, we all know it would happen.)

There are exceptions, mind you. EVE Online in particular had some of the most touching (and also weirdest) ways to memorialize people, from cyno vigils (in some ways, the most poetic and haunting player memorial tradition I've encountered in any game, given that you basically come together to light a memorial candle to the fallen so bright that it is, for a brief time, a new star -- or a lighthouse to guide them safely to shore on their final journey) to the player-created and run Molea Cemetery, which the devs turned into an official thing about two years ago. But many of those are facilitated by being in games like EVE where players can influence the game-world, such as building structures or putting down objects or whatnot. Witness that the cemetery consists of cargo pods jettisoned to orbit around a monument, with each pod having its name changed to a short eulogy remembering the fallen.

(Mind you, they can also face unique threats due to the nature of those worlds as well -- witness how many times various troublemakers tried to nuke the Molea Cemetery.)

Given the nature of FFXIV as a game (and the realities of the engine), what would almost make more sense is a picture frame where you can just tell it to display the portrait of a given character in the fashion of their Lodestone image -- whether or not the character is currently active. It doesn't have to be specific to a memorial, so you don't need any sort of review process or way to "prove" the character belongs to a deceased player; people could just as easily use it to put a portrait of themselves up in their house or have a portrait hall of the FC officers in an FC house or whatever. And you could limit the number of these dynamic portraits you could put up in one estate, so no one drags a housing server to a crashing halt by trying to put several hundred of them up in one spot, all pulling player portraits dynamically from the Lodestone. But even those limitations would still allow people to make little memorial spots within their house or FC house. Obviously, it leaves out folks who don't have housing, which is not ideal; we already have enough systems gated on home ownership (plant crossbreeding, FC workshops, etc.), and it irks me a bit to even suggest adding one more.

But otherwise, any real options for in-game memorials will often rely on the creativity of the players themselves... as with EVE's cyno vigils. (Or as with folks I've seen who create a person's character as a retainer and put the retainer in the FC house yard or whatever, so that the person is symbolically still around and remembered.)