Herremann the Wise said:
Perhaps the DM does not like repeatedly handing out TPK's to "dumb" players? Sometimes like a gambler, the players can't help themselves thinking that the possible rewards will be worth it. C3PO: "But the chances of successfully navigating an asteroid field are approximately..."
Players: "I don't care! We're fighting it"
This is a logic problem. It can be solved, though.
Let's look at it first. Assumptions that need to be true for it to work:
1. Defeat generally means TPK.
2. TPK means that the campaign crashes.
('Crashes' - not necessarily 'dies.')
3. The DM doesn't want the campaign to crash.
All this taken together means the DM doesn't really want the party's defeat (except in the "end battle," maybe). Which, by itself, is not necessarily a problem. But if she then goes and fudges things so the PCs survive as a result and the players figure it out, this problem can occur - i.e., they don't retreat because they know the DM (probably?) won't let them die.
Now, personally, I would slaughter such players for meta-gaming alone. Though that's obviously not what the DM for whom these assumptions are true wants.
So how to fix it?
A lot of people will suggest you should just kill them. Which is a perfectly valid approach, if you're fine with that kind of thing.
Me, I'd instead alter a basic assumption. Namely, the assumption that defeat usually means death for the entire party (and thus, campaign crash). Change death for all to "death only for those who can't be saved at all - and for the rest, imprisonment, torture, and losing all equipment" and suddenly, a defeat is a setback rather than a campaign crash.
If that doesn't seem harsh enough, make sure their captured magic items will be shipped to the dark lord's castle (or similar setting of the campaign finale)/destroyed/sold/whatever so quickly after their defeat that their chances to get them back before they're lost (almost) forever are ca. 50:50.
In summary, this means a defeat doesn't end your campaign - which in turn means you can let the PCs lose. Which means they have an incentive to consider retreat an option because if they don't, they will lose (and likely lose all their stuff - which should scare even meta-gamers).
Though in case you aren't even willing to live with setbacks, I can't help you.
