Rationally, higher death penalties should cause better gameplay. The worse the punishment, the more effective the learning. This isn't what actually happens. People don't go through life doing everything as a cost-benefit analysis and taking the ideal outcome. Notice how bank and credit card fee increases haven't made people more responsible/careful and avoid the fees. No, the banks just get more money. Pretty smart if you ask me; I wish I'd thought of the idea of charging people money for being dumb*.
Raising the cost of failure doesn't reduce the chance of failure. People often don't respond to the warning. Time lost, durability lost, consumables wasted, these are not making us play better. If anything, they may be making us play worse.
Let's go back to a fact: America is awesome. We're innovative and rich as fuck. Because of innovation. We take risks that others would not. How, why? It's not just culture. It's the situation we create. We have some of the most lenient bankruptcy laws in the world. In other words, go out and fail a lot, we won't throw you in prison, let you starve to death, or take all your possessions. Maybe the last one. We value the persistence because eventually, it yields some amazing stuff, such as everything we have.
By not punishing failure, we encourage people to take risks. We encourage people to try stupid ideas. Sometimes those are actually brilliant ideas and the payoffs are huge.
Could this apply in WoW?
If death was even less of a burden, we might be more willing to take risks. We'd be more wiling to "see what happens if we".
The highest guilds are the ones that create strategies and learn the fights, and then the rest of us imitate them. How do they do it? By dying a lot. Also skill, but that's not helping my argument, so let's pretend it doesn't exist. For them, death has a small enough cost compared to how they perceive the reward. Most people aren't as willing to die a lot. Would lowering the death penalty help?
If we weren't so afraid to die, might we read wowwiki and tankspot for tactics less? With more people innovating, might we find a thousand new ways to do a fight, when we're willing to take risks?
Would we not demand that all PUGs be overgeared, expecting Ulduar gear for Naxx and ToC for Ulduar and thinking 25k is low for a random heroic?
* I am using this as a generic filler for whatever causes a person to miss a payment or overdraw, such as being dumb, forgetful, irresponsible, or broke.
Or should they be higher?
What would this accomplish? If we lost something more, worse corpse runs, more durability, experience loss, would that change anything? It would make us more wary of death, more cautious. Would we learn faster? I doubt it. If the failure we have won't make us read our spells more closely, what will? Increase the penalty and the mindless might just leave, and take their money with.
Remember the recent information about 70% of players not going past level 10? Doubtlessly many are spam accounts or people who just aren't going to enjoy the genre. But how many more would be people who went from level 7 to level 6? They'd have to be pretty back, right? Well yes. God awful. Terrible noobs. And exactly like new gamers. Personally, I'm glad I didn't quit years ago because of some stupid death penalty. It wouldn't have made me look up more info on my class. The concept was entirely alien to me. I may be assuming too much, but I'd guess most new players aren't coming in to WoW with tons of experience and the idea of needing to tap out of game resources.
Higher death penalties won't make us learn any faster, but they just might kill WoW faster.