The argumnet that getting two more free spells when you level back up from dying makes dying a "benefit", and therefore should be disallowed is ludicrous. Here are my thoughts on the matter:
1. Wizards have a Class Ability called "spellbooks".
2. By this ability, at start, a wizard gets a spellbook with spells
in it. This is the only class ability based around changes made to a piece of equipment.
3. By this Class ability of Spellbooks, every time a wizard acheives
a "new level" they "gain" two "new spells", which means they gain them in their spellbook, adding them to the initial spells, or
spells paid for with gold.
3. When a character dies, and is subjected to a Raise Dead, or
Ressurection, they lose a level as if Energy Drained
4. In an energy drain, "Class abilities are reduced to a new, lower
level"
5. This text (4) cannot be construed to mean that a spell is removed from a spellbook.
6. So the spell is still known, and preparable in any slot that is
capable of preparing the spell
7. "known spells" are defined (glossary) as follows "A spell that an arcane caster has learned and can prepare. For wizards, knowing a spell means having it in a Spellbook."
8. By this definition, the statement " A wizard can use a borrowed
spellbook to prepare a spell, if it is a spell he already knows and
has recorded in her own spellbook" is redundant.
9. p 155 repeats the statement of (3) that Each time a wizard
acheives a new level, she gains two spells of her choice _to add to her spellbook_. These spells represent the results of research: "a certain ammount of spell research between adventures".
10. As an aside, spells of a higher level than the Wizard may cast
may be added by paid copying.
11. The rules for replacing and copying spellbooks do imply that a
spell can be "known" without being in a written spellbook, if the
spellbook was destroyed or "lost". A borrowed book can be used to prepare the spell, because the wizard has already gone through the process of learing how to express the spell in his own idiosyncratic arcane notation, and how to prepare the spell.
12. No rule states that the ability to "know spells" in this manner
is a class ability which is reduced by level loss, aside from the
inability to prepare spells of levels which are not accessible due
to level.
13. SO: loss of a level will not in any way hinder any spell in the wizards spellbook from being prepared, unless the spell is of higher level than the highest level preparable.
14. If a wizard who dies returns to his previous level by earning
experience, by the class ability "spellbooks" gains 2 new spells,
for free, because she is acheiving a new level.
15. Even though she is returning to a previously earned level, the
rules do not distingish those things, or else she would not gain any of the standard level gaining benefits of p 145, which are all
descibes as benefits of a "new level".
16. This is not unbalanced, in terms of power. 2 free spells more
for dying and earning a level back is not a broken benefit.
17. This is not unballanced, in terms of other clases. "spellbooks"
are a unique class ability of Wizards, and it is the only ability
based around a piece of equipment. Equipment has the advantage of not necessarily being lost when a charcater dies. Equipment has the disadvantage of being lost by many other means while a character survives.
18. Because the 2 free spells for acheiving a new level of the
Spellbooks class ability are the "result of research between
adventures", a level "restored" by the Restoration spell will not
result in free spells for the wizard. No oppostunity for reserach
exists, and no "new level" is being "achieved".
19. Any spell in a wizards own spellbook is written in the wizard's
own idiosyncratic notation which is automaticly readable by the
wizard with sufficient light. No rule prohibits a wizard from ever
preparing any spell in their own book of a level that they are able
to cast.