Like JDragon, we have an understanding in our group that familiars who get into combat are fair game; keep them out of combat and out of your enemies' faces, and no one is actively going to hunt them down.
But back when I was in high school, playing our ridiculous AD&D game, I saw our GM deliberately assassinate a familiar. Basically, the party's wizard was being played by my friend Chris, who was a hilariously offensive guy. His wizard had a black cat familiar, which he immediately named "Fabrice." Fabrice the kitty.
Our GM said "That's a stupid name for a cat." Chris fired back with "Yes. Yes, it is. Fabrice the kitty it is, then!" And for the next half-dozen game sessions, Chris would find a way to name-drop Fabrice, our GM would fume over what a stupid name it was, and Chris would gloat over the name and make up little songs in an exaggerated French accent all about the wonders of Fabrice the kitty.
One day, the sentence was passed: "Chris," our GM said, "you either rename the cat, or I'm going to kill it." Chris refused to rename Fabrice.
And the next session, we got nailed with a fireball that left everyone injured but alive...except for one very small, very crispy, very unfortunately-named cat. And you might be saying to yourself, "But why did Fabrice have to make a save?" I'm afraid the answer to that is "Because the GM is always right, even when he's deliberately breaking a rule just so he can kill the cat who for some reason he is really upset by."
Chris took the xp hit and had a touching in-character funeral for poor little Fabrice, but he never was interested in getting another familiar after that. By that point, he'd worked his way up to using Charm Person and a real talent for leaving NPCs with irreparable emotional scars as his primary method for making our GM uncomfortable.
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no more dysfunctional than your typical teenage hack-and-slash game, really
ryan