Somebody earlier mentioned the Death Spiral, and I want to reiterate that. If you've ever played Werewolf, you've probably seen a death spiral in action.
You get hit and mark off some boxes of damage, enough to give you a significant combat penalty. You fight a little more, but now you're fighting at 75%; it's easier for enemies to hit you and they deal more damage when they hit, and you aren't hitting as well. So pretty soon you take more damage and mark off some more boxes, and now you're fighting at half power, and you can't even run away because the enemy has more dice than you and can counter anything you want to do, so you take more hits, and pretty soon you're dead.
It's actually harmful to the flavor of the system to do it this way. Players are more cautious, and they don't want to fight beyond the point where they start taking significant damage, because they know they're on their way down. Especially in a "monsters" game like Werewolf, you wind up with players being cautious and slow when the flavor of the system is that they're all powerful monsters who prefer to charge in and kick butt.
Star Wars Saga Edition doesn't do *so* badly, with that condition track stuff. At least in that case, the condition track is fairly easy to move back up even if you don't get healing, so it's easy to get out of the death spiral without actually breaking off from combat.