I liked the way party members were dropping like flies in FFVI, it made the struggle feel so much more 'real'. Draging the same ~6-15 people through every event without anyone ever perishing just seems a little too easy to me. If it is a real ordeal, sacrifices must be made along the way. (and I was EXTREMELY pissed off when they brought everyone back at the end of VI, made the whole game seem so cheep and shallow.)

Of course having characters die is completely dependent on having a character progression system that doesn't require a large amount of permanent customization of the character. Thought I though Gaulf's death was done very well, I would be screaming bloody murder if Cara didn't get all of Gaulf's old abilities. Once again, in FFVI there was no individual character development, only levels. If a character had died mid way into FFX, that would have been trouble.