Morrowind did have that, and a lot of people complained because they killed the wrong people and broke quests including the main quest. I didn't mind it however, if I broke a quest I had no one to blame but myself so whatever. Now though with random enemies being able to take out NPCs, folks could get quests broken through no fault of their own. So it is a nice thought (I kindof wish they had essential NPC markers as an option on the settings) but it might be frustrating if quest related NPCs died all of the time.
THe thing is though most people can just hit quick save every 10 min or so. Thats what I do. Reloading and not killing the important guy next time isn't hard, and non-killable NPCs really kill the role playing.
>beat the hell out of someone
>they stand up
>OH MY GOD, YOU'RE CHAMPION OF THE ARENA