Also, death being final suits some players and not others.
Some players like continuity and keeping the same PC for an extended period, and their PC dying is something they really really don't want. Conversely, they may enjoy or be willing to put up with long term or short term adverse consequences that still allow the PC to be played.
Some players like playing lots of characters, and a PC dying is actually an opportunity for them to play a new one. However, they are likely not to put up with adverse consequences to an existing character, going so far as to retire or suicide the PC to avoid them.
So permanent death punishes some players, and rewards others, for their play style. I think it's a viable option for a game, but needs to be advertised in advance, along with expected death rate, so that players can make a rational choice about whether or not to participate.