I guess I should post some to keep up the post count war?
I don't see any problem with this new penalty. Obviously XP debt was a joke for capped characters. Debuffs and equipment damage are well established precedents, so I don't know where the people threatening to leave are going to go. Nowhere I guess.
Up to 10% item wear (or whatever it is) per death is totally manageable, as are negative levels for a few minutes. Maybe .. just maybe .. the equipment damage is there to make you stop and think before you croak for the 10th time in a quest. Some incredible example I read where someone died 10 times in 30 seconds is not usual .. for anybody.
Lag deaths .. I can count on a single hand the number of lag deaths I have had in two years. Falling bug deaths, same thing. Neither are significant enough to even attempt to account for it (how could you anyhow?).
I mean, how many times are you people dying in a typical quest? Maybe I really don't want to know. But know that I've spent my fair share pugging .. and maybe it's not as often as you claim.