The fear of dying due to exp loss in order to create a more dramatic experience is a terrible albeit unique mechanic. Speaking strictly about FFXI, I have done raids where I lost 2-3 levels (75-73) Just because the runs would last 2-3 hours. (Namely End-game) Dying is just as much a part of video games as storyline. In most games when you die, you reload your last save (Normal console RPG) or HP (Bioshock). In some games your body drops and you have to go and fetch it. (Diablo, WoW).

The issue with exp loss is that, I feel as if SE is reaching into my pocket and stealing not only my RL money but more of my precious time. That is not what I want to do when playing a game. While I agree the death status should have a greater impact. Currently they have 5min weakness and Duradamage. While it is possible that they could add Skill CD Reset so that it would make fighting that much harder and the need to stay alive that much stronger. In the end you are paying someone to entertain you. Do you really want them to throw pies (and squirt water) in your face? Is that what you consider fun?