Respawn?

As for encumberance: I think having a small pool of equipment that one can access while in combat or in a dungeon whilst being able to carry anything you want all the time is perhaps a better idea than being able to pause and access everything you own, as well as having to make several trips back and forth to loot a dungeon.
Dungeoneering is fun, but so can be the preparation. Let us choose what to use, and what to stash.