I have always been an one for making battle more fluid and realistic so we dont have the sword sponges of past. I just feel regen wouldent work in this type of game. Honestly if you want my opinion on how I think fighting should kinda work look at Demons Souls. That game requires you to think in battle but also makes health regain items very key because one hit can put you down to almost no health. Magic should have a small bit of regen but not enough to out do potions. Health should be static just because honestly no one heals from a claymore to the arm instantly. As a RPG its not meant to be a fast paced experiance put into a 10 min round. Since it has to last for hours without stopping theres a requirement for more thought and substance and thats why I feel having an active regen like that would not suit this game too well.
As a note I do not feel Skyrim should be as unforgiving as Demons Souls since DS is much more linear by means of levels while this is much more open, though it should still be tough so that each cave or watever you go in feels like one of those levels and they all should have multiple parts and be deep so when you do make it to the end you feel accomplished.