Yeah, seriously. As someone who's in this because he's a huge Pathfinder fan, but is already worried that the enjoyability of the game will die to the PVPness of it, this would probably be a death knell for me.
Before trying to add in even MORE penalty than losing all your gear and getting really ruined by dying, let's see how bad it already is. Personally, death is already a huge penalty if you ask me, more harsh than even the crazy naked corpse-run/xp loss days of Everquest 1 which are far harsher penalties than have been seen in a long time in an MMO.
Hey folks, don't know if anyone would be interested in this, but I have begun a blog being written from an 'In Character' point of view, of my character as he travels towards the Crusader's Road and towards launch of the game. The blog is being written as his entries into the journals he is keeping, documenting his travels, and will continue after the launch of the game, serving as a sort of documentary of one man's journey in Pathfinder Online from pre-launch onward. I'm currently trying to document his journey on a daily basis, though of course some days may get missed.
Kaeros' journey began in Absalom for the current journal, although he's not yet revealed much information about his own history before the first entry of this journal so it's hard to say where he really started. He's currently landed in Cassomir, and is planning to take the Sellen river northward to the River Kingdoms. He'll get in hijinks and mischief along the way of course, and meet all sorts of people (if you're interested in meeting him in an entry, I'm certainly willing to listen to your idea!).