I don't have a problem with any of that. My favorite game for the past few decades has been GURPS which is all about embracing your character's disadvantages.
But, all players need to understand that they are playing a cooperative game. If I decide to play Jerkwad the Useless in a game that's not intended to be about losers losing, then how am I contributing to the fun of the group? Ideally, this gets discussed during character creation or session 0. Does the group want to play a highly focused special ops type of team or a loose collection of misfits? Both can be awesome, but they're different.
In the dwarf vs. hill giant example, there are so many things that went wrong. One way I've seen scenes like that work well is for someone else in the group to rein in the hothead's suicidal tendencies. So when the giant taunts the dwarf and it looks like he's going to attack, another character leaps out of the bushes, tackles the dwarf, and apologizes to "Sir Giant..." Lots of characterization. The threat level of the giant is honored. The dwarf gets to play his stereotypes. And the adventure continues. The fact that he was left on his own to be "splattered" suggests that some meta-conversations are needed to ascertain why these characters are working together in the first place if they're not actually looking out for each other.