The XP loss punished marginal players. By "marginal" players I mean players who, for whatever reason, do not find getting XP to be "easy". They might be new, they might be inexperienced, they might like soloing, they might suck.
In my case, I've had problems with XP for a variety of reasons: (1) not enough time so I avoid long chain quests (STK, TR, Deleras, CO6, Threnal), (2) don't PUG often because I'm often not sure if I have 20 minutes to play or 3 hours to play, (3) like to explore and solo a lot of stuff, which is risky and leads to deaths, and (4) most serious questing done with a static group of 4 who avoid having pre-knowledge of the quests.
#3 and #4 lead to more deaths, and this is where XP debt hurts. My first and primary character is a rogue, so, over time he has died much more than the rest of the group (fighter and cleric have much better survivability, wizard is smarter with aggro and a better twitch player).
BTW, soloing explorer areas (Atraxia, Desert, GH) to make up for lost XP has turned out to be a great way to rack up additional XP debt for me.
