Wouldn't be popular enough to warrant the server costs, and would drop in popularity dramatically over time. It also includes potential risks, because players that choose to play on these servers have a chance of quitting the game (and thus not getting SE money) if they die.

The feature doesn't draw in players that aren't playing the game so it's not an effective marketing tool, it's just an option for players already playing the game... with a risk of losing those players when they lose everything. Not an appealing idea for SE.