What if where you spawned in the Death Realm depended on where you died, and this would be closest to the portal of the major town you were closest to.  There could be portals to the other major towns but they would be much further away and more trecherous.

I agree that dying should be painful but I hang out in Oja quite a bit these days (non-Enkidukai) and so I have a distinct disadvantage to someone hanging out in the arena all the time.