Most people have covered a lot of what I'd say here, but I have a couple of other bits to offer.
First off, yes, I am a supporter of the idea that the players need to know that their characters are at risk. I don't have qualms about seeing a PC get dead... and players should understand that PCs can and will die. But, as was pointed out earlier, the game is the PC's Story... so it is much better to have them die in a plot-pleasing fashion, if possible. Generally, I have a set of guidelines about PC death...
1/ Sometimes, the dice just don't work for someone. THis is a judgement call. Would the death be dramatic? Fulfilling in a way? Good chance of revival? If so, let things fall. If not, then... you're the DM, fudge it. I don't mind giving the PCs a certain degree of leniency.
2/ Is the player too cocky? Heroism is a bit different than stupidity. And even though the PCs are the heroes, even heroes have to understand the concept of 'consequences'. I have found, many times, that an imminent PC death is often due to overconfidence or arrogance, or a simple failure to understand that the world is much bigger than you... in literature, hey, we call that 'hubris', and we all know what happens there. Sometimes foolhardy works... but most times, it doesn't.
Let them die.
3/ Boss fight. When I come to a crux point in the story, I play up the idea of a 'good death'. Against the nemesis of the story, there should be a lot of risk. People should feel the threat... but I give them opportunities to die well, if possible... and I prefer to let the dice do what they happen to be doing, unless it would totally kill the mood.
4/ Most important: my players KNOW that I have no compunctions about killing PCs, but they also know that I am fair. Communication = most important part of the game.
As for the specific issue of the Orc whomping on the cleric, I don't know the exact circumstances, but in general, I agree that it was a justifiable action... especially if the Orcs recognized the fellow as the cleric. With all the wacky magic/feats out there, a cleric might just be playing dead, and prepping some nasty spell. Whoever said it earlier said it right; kill the healers DEAD. And the spellcasters too.
If it was not a particularly important fight, I may have had the Orc pass the fallen cleric by, though. Save the death for the big scene.