I've played many, many "dead is dead" playthroughs and I have to say that those have always been the most fun times I've had with Elder Scrolls games. However, recently I got to thinking why I love doing this so much and it comes down to immersion for me. It really makes you think about what you are doing, how you are engaging in battles, strategies, etc. However, it is sometimes difficult for me to delete my character after he dies, especially with hours and hours poured into him. It got me thinking, perhaps there's a better way to make dying more meaningful. There may already be a mod for this and if there is please point me in that direction.
One of the things I've always found a bit (not sure what the word is) unrealistic is that you can just Rambo into any situation and if you die, just re-load the save. It seems that gone are the days of only having so many lives and actually losing at a game. I'm not saying that I want there to be a live-counter like in Mario but what would be great is to have some way to make dying a burden and something that you try to avoid at all costs.
I think it would be great if after you die (on in this case you never actually die but rather you're knocked unconscious) you would either appear in the temple of Kynareth in Whiterun recovering from your injuries. All of your stuff would be at the location where you fell in battle, held in a chest or simply in a sack lying on the floor (I'd be fine with whatever). The other thing that could happen that would be really great, is to be put into some kind of cage or prison if you were "knocked out" by bandits. From that point you'd have to escape and recover your gear.
Either option makes it so that you have to think about what you're doing at all times and for me at least, would make an already great game even better.