This article looks at the progressive decline of the death penalty in MMO's. It tracks back to the beginning and the existence of a real death penalty (IE: you are dead) to the now essentially non-existent death penalty in the World of Warcraft.

At one point in gaming history, this meant you’d lose everything: your +30 elf shoes, your 1200 gold, your character itself. Death made players unhappy, not unlike their Orc nemesis. To cheer everyone up, developers made the next game and death wasn’t so bad. You’d lose the gold, or maybe the elf shoes too, but nothing else. The trend continued. With every game released, death meant less and less until everyone was happy all the time, because death had become impossible. Every inconvenience had to be removed; death, being the biggest inconvenience, was first to go.

Player immortality is exactly what happened to Adventure gaming, and it will happen to MMORPGs.

You can read the whole article here.