At which there is nothing to do but reload and start all over again. In a game which only lasts 10 or 12 hours...I've no problem with that. In a game which lasts over 100 hours...I've a huge problem with that.
But...to each his own.
But there are many ways to make quest not "break", especially with this radiant AI thing Bethesda is working on so that if you kill one NPC, another NPC will give you the quest, thus making it more like real life. If I go into a job interview, stealth kill the manager, that job isn't over. Someone else will do the interview. Life will go on.
Not to mention, you can make it so only the player can truly "kill" an NPC, and other NPC's can simply make them go unconscious. There was even a mod for Oblivion like that. It's not hard scripting.