I have no problem with getting my character killed, then you can just use downtime to create a new one.
but when you spend 2-3 hours on online game playing some PC game as your character can do absolutely nothing, but not dead is bad design.
I don't think it is about "losing". If you want them to "lose" you'd take all their hit points and kill the character.
As Horwath has noted, it is about whether or not the player gets to play, and how play happens within a social context in which eliminating a player is often awkward and boring.
And it isn't about wargaming roots, either - it transcends game genre. Older multiplayer games have a tendency to eliminate players as you go along. Many more modern games have structures in which all players get to continue to play until the game end condition is met, and we figure out who won afterwards.
Bring some henchmen?
I understand that "sitting out" is no fun and needs addressing (although i hesitate to call it "bad design" since that label gets slapped on anything people don't think is fun, which is not the same thing). But exactly how to address that in a game where Bad Things Happen is an open question.
Would it be better if those "perma-paralysis" situations were made insta-death instead? I'm not sure one way or the other.