To be perfectly honest, it is pretty dumb and there is no excuse for it. I would rather have it so that falling from a great enough height will kill you, but whenever you die you can just revive at the nearest aetheryte. A feeling of danger around being high up and being nervous about what could happen if you fall, makes navigating the terrain more exciting. I suppose that sort of dynamic is somewhat diminished in a game where you can easily unlock flying mounts and elevation is of no importance, though.