I love games that work around death but still make 'losing' matter, like in Mount and Blade where if you 'die' in a battle, you are unconscious and are taken prisoner until your freedom is bought or you escape. Might be better if death was possible, say you can get executed if you get captured by someone extremely powerful who you have -all the rep with them. Failing matters, but you don't loose everything.
Some mods for fallout and skyrim do similar things, where instead of dying you wait for the battle to finish and see what happens next.
In online games that's hard to capture, though, so permadeath for that character can sometimes work better. But it always depends on the game, don't wanna have to restart a game just cause I died.