The problem with death penalties is just who is it going to affect the most.

Item duration loss - shouldn't really have any affect on established players as they have the resources to recover, but new players don't have the resources, and going on how hard I'm finding it on the War server getting cash isn't easy as a new toon either.

Cash loss - pretty much the same as duration loss, wont bother the vets but will hurt all of the newer players.

Item loss - same as above, but it will be interesting watching vets trying to get their best bone armor and red & white striped shovels back from a rev, especially if it's at max HP, although I suspect your more likely to get a hell of a lot of tickets complaining about it.

None of it is really going to "hurt" the vets, it's just going to give the Steam crowd more ammo in their efforts to make the game look bad.