In single player the death mechanic is okay as it is right now. It brings a challenge and makes you cautious when exploring.
What I am talking about is multiplayer. I've been on several servers where I got ganked or mugged for my stuff. I could be spelunking in a cave and an other player would find me and he attacks me for the ore I collected. On these servers you learn be light. like put all your valuables in a protected chest, and only have tools, armor, and a compass, but haven have mercy on you if you're mining or coming back from mining expedition with your inventory filled with valuable ore.