Actually, the only way to truly "kill" a character in EVE is for the owner to reprocess the character into biomass on their login screen. Clones only facilitate the safeguarding of EXP, they are not 100% necessary in order for your character to "stay alive". The penalty for not having current clones is a steep one, thus most players (the sane ones) always keep theirs up to date.
Back on topic, I am against the idea of permadeath in an MMO like Mortal. As you might have guessed, I play EVE Online, and in EVE your character's name is your reputation, identity, everything. Your character's name is tied to all prior corporations (guilds) you were in, what security status you are (how good or bad you are), etc..
Permadeath would remove that sense of ownership and responsibility for your character that you spent time and effort training and building your reputation. Say you're the first master swordsmith on the MO server, but a rival smith hires an assassin to kill you. You probably aren't spec'd for combat, you have no chance to defend yourself against a hitman. Should all your work spent moving toward that goal of becoming a master smith be allowed to disappear without you being able to do anything about it? I say a resounding no, that will only drive large numbers of potential customers away.
There is such a thing as 'too realistic', and it typically makes games very unfun. Should there be a penalty for dying? Absolutely. Should dying completely destroy all your time and effort spent to date? Hell no.
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