I like the idea of some type of system that places you into an alternate reality where systems change. For example: Being in a Bally Room might cause you to have -2 hit point regeneration because the Bally might give off a bad smell but whereas normally, you were fighting it outside of a dungeon, the smell would not affect you that much. So, normally hit point regeneration would not be affected.
The problem with penalties, to death, is that, it makes the game slow down or go backwards. It's kind of like, you're pretending you never died, even though you have, several times.
Stat loss is bad. It's like whoever invented it was a life guard at a public pool. Where if you ran, they would bench you or if you did a cannon ball to close to someone they would bench you. It made it so that anyone who wanted to do cannon balls, cry babies or can openers could not do it because you needed more than 3 steps to get that height and if a life guard saw you, they would blow the whistle or point at you. This is why it's nice to have your own pool.
When they made the Shard of the Dead, instead of using insurance, I opted to take Chivalry and Resisting Spells. This allowed me to be completely naked. All I needed to do was buy several bucklers and a knife. This way, if I died, the only thing I could lose was a shield or a knife. In most cases, the shield and knife were not even looted.
So, by taking away insurance or adding to the cost, you're actually limiting the game experience and making the game less fun by limiting the ability of each character.
An example is: A mage that has 10 mana. Now, after he equips all kinds of gear, he has 250 mana. This allows the mage to take up all kinds of different spells and different magics, like, mystics and weavers. So, now rather than being able to cast one spell, the mage is able to cast a variety of spells, making the game more exciting and more unpredictable.
So, rather than limiting, you are now expanding. I don't see why you would want to limit your experience or your ability. I would rather see the challenge greater and more tactful.
They should add things to the dungeons and the spawns to help keep up with the challenges. For example: We have auto target nearest enemy, so why not fill the hallway with mist or smoke. You know there is a Bally in the smoke somewhere with you but you can't see it. Maybe you swing into the fog and hit nothing.
I would rather up the stakes than take away and penalize myself. The game used to be pretty much, run to a healer, get a rez, put on all your gear, die, run to a healer, run to your body, put on all your gear, die, run to your body, missing stuff, go to your bank, replace your stuff, go back, die, lose something, have to go shopping, replace it, return, die. So, insurance was a good thing. It made it so you could continue what you were doing, rather than, taking care of the penalty.
So, I guess, more penalty for me, would not be that great unless I could carry something to off set the penalty, like food.
