domino said:
There's simpler, and more reasonable ways to do that.
"Ok, as your first level characters are walking through down, they get smashed by a fire giant. Roll new characters."
I must say Domino, I'm dissapointed in you. That's an unimaginative and trite way to enforce the proposed 'wizards must carry only daggers' rule.
A much better way would be:
"OK, as your first level characters are walking through town, the God of Wizardry (or related god) appears, admonishing the wizard for carrying a staff, and summons an army of fire giants who smash the wizard "for touching an unclean weapon" and the party "for associating with an unclean wizard"... and then admonishes the town to never allow a wizard to touch any weapon other than a dagger, or next time the fire giants will smash them too.
OK, now roll new characters.
Side note: This also has the nice effect of making towsnpeople afraid to attack wizards with anything but daggers. Misinformation is awesome. Mages have been known to encourage this particular myth.
Edit1: (Oh, wait, you were talking about how to torture PC's. Yea, you have to do THAT more slowly, like kanithardm suggests...)
Edit2: If a GM ever does decide to have a 'daggers only' rule, I strongly suggest that they use the above scenario the first time a wizard attempts to carry an alternate weapon. Just carry, not use. Or maybe just picks one up. Note: When casting identify, wizards DO NOT TOUCH non-dagger weapons).