Heh, death is a bad thing, get used to it. Death should be avoided and we instituted non lethal duels to compensate some. Some day there may be a means to alleviate the penalty . . .

For now, know that death is not good, or fun, or a shortcut. Player should take less risks. The excessive realism argument is bunk, it just is. You don't get spared from death in the real world. Most games have some means in place to discourage death.

I agree no story can move without conflict, but if there is no risk involved death has no meaning and that is much worse for the game. How can you have conflict if death itself is meaningless?

It isn't an argument of excessive realism.  It is an argument of excessive, pointless, impractical means to solve a problem.  You're crushing a peanut with a sledgehammer when your bare hands would do it faster, easier, and leave the nut inside intact - then justifying yourself in stating that the peanut is still crushed, regardless of it still being edible.

Removal from the game for hours on end isn't neccessary to discourage death.  It discourages things beyond death - good things that lead to positive development.  You are going to create something stagnant with this, and for a roleplay community, that is certain death.  Anyone that has seen more than one come and go will tell you that much.  In practice, it is ALWAYS better to undercompensate, then scale upward.  Not vice-versa.

Just because you can do something, doesn't mean you should.  Going overboard rarely accomplishes much with something so relatively sensitive.

I'm sure that this has been stated before; but there is a balance to be struck here...and from the sound of it, the balance has tipped a bit too far in one direction.

If the penalty for death is too severe or the toll not relatively easy to recover from, then you are going to discourage combat - in all forms; from PvP to exploring.  It is understood that the idea is to curb exploitation, but also understand the nature of the problem you are attempting to solve.  In principle, it is impossible.   No matter how ridiculously over the top you make a penalty for dying; someone will find some means to exploit it.  Continuing too far down the path will only result in a userbase that is unwilling to take any significant risk in anything.

There is no serious merit to roleplaying everyday life.  There is nothing unique or interesting or innovative in that.  If you want a story to be remotely interesting, there needs to be conflict.  Not all conflict ends in fighting, but it is going to seem odd when situations take a seriously odd turn toward the obscure and awkward when disputes that would otherwise come to blows don't because neither side wants to deal with an hour-long tedious respawn.

It isn't really roleplaying when you don't have others to interact with.  So ask the question:  What is the difference between this; and simply restricting access to playing a character outright for hours on end; only to have the character return under the tedium of being essentially crippled?

A bit much, in my opinion, toward an end that is accomplished via easier means.  It's sometimes nice to think that the system is great because no other game impliments it...but sometimes it is good to look back and ask why that is.