I have a hard time playing 'death with consequences' if the consequence isn't full-on DiD... which is also hard for me to do. So basically, for me it's either DiD or reload. (I play on Adept, so usually when I die it's due to some silly reason anyway - an unfair kill cam, or some quirk of the architecture. At least, that's what I tell myself so I can sleep at night. )
When I reload, then, it's as though the 'mistake' never happened. It's not part of my character's story.
When I pay DiD, the death *is* part of my character's story.
Another consequence for death - but not death itself - would seem difficult to work into a narrative, and if I'm not concerned about fitting it into my character's story, then I may as well just reload, right?
I suppose the 'you lose everything' consequence for death could make sense in a story way, depending on circumstances. Say I was 'killed' by bandits - I might RP that they loot my 'corpse' and leave me just barely alive. But what if it's a dragon that does me in?