I would like perma-death for another reason. One of the things I like least about MMO’s is that there is no end of game. No matter how many dragons you kill there is always just one more dragon. Perma death would give you that ending even if it wouldn’t necessarily be the nicest way to finish a game.
How about making perma death inevitable just like it is in real life. After a certain level players begins to age and get weaker rather than stronger. You can decide yourself whether you want to retire to a tavern to live out your old age in peace or whether to go down in a blaze (literally) of glory fighting dragons to the last.
I actually think a mechanic like this would improve the game experience and enhance my enjoyment of the game. The biggest problem with it is that it probably wouldn’t enhance the developers profits because perma-death gives people an excuse to leave the game.
Perhaps if the game was good enough folks would be motivated to play a new character …?