I'm a bit confused when you say:
How could the victim write a book? She/He is dead. What would the assassin (or an alt of the assassin that gets deleted after writing the book) write in the book? "This guy got killed and robbed. Though luck but thats life ... survival of the fittest. Feeling sorry you didn't went here with somebody else?"?
Why would you actually be dead unless you foolishly accept the challenge? Is it possible to kill someone without a challenge in place or is this just future discussion for if PS goes free-for-all and allows backstabbing and killing unsuspecting players? I'd think there would have to be legit consequences for such actions in place... capital punishment, banishment, permanent marks, etc.
For now, I thought the only way you can get killed by another player is if you accept a challenge? And since the other players can see how they match up against you by reading your description, you'd learn quickly not to accept challenges after the first pummelling. Besides that, their banter is just typical school yard, bully, bs stuff. You have full range to fight back with your imagination and role play your character to how they would react to a bully. Course, I can never think of things fast enough... so in a way, it is survival of the fast witted. It happens in real life, so I'd expect it to happen in a world controlled by humans, too, especially with less restrictions on their behaviour when they are in the safety of their computer. Hopefully it doesn't get out of control.
I think it'd be great to get rid of the match-up description eventually, so its tougher to find out if someone is an easy or tough target. That or you can alter it so you look weak and then accept the challenge when it comes across and put the player in their place. Humbling experiences have ways of changing behaviour...