Well, of course we are all used to it, but ultimately it is a really poor mechanic if you think about it. The only consequence of death is how long you have to replay since your last save (and in most games you control that yourself). So there is really no reward system for carful play and roleplaying risk-awareness, which I think can really add to atmosphere and increases the complexity of decision making with regard to encounters. In M&B (especially when played in save-on-quitting mode), you really begin to evaluate the armies of your adversaries carefully. In the typical FPS or RPG, you typically rush into the engagement, and then reconsider your strategy or your options if that fails.
Thats not per se "bad", but I sure find it refereshing if games try something different every now and then, at least if the focus is on actually the feedback mechanisms for "failure" (which may be combat death, but really the philosophy also extends to failing quests etc., I like it when there is specific consequences, that are interesting enough to want to keep playing regardless).
Oh, it's not that I'm a big fan of reloading - but that I'm a fan of death being the natural consequence when failing in a life-threatening situation.
Maybe it's my lack of imagination - but I have a hard time coming up with better ways to handle that, that also feel plausible and immersive.
The System Shock mechanic is one way - and that was fine - except that I just reloaded instead, because I didn't feel like retreading or dealing with lost resources.
But, the simple act of dying and reloading is actually incentive enough for me to play smart. Maybe it's because I just enjoy playing smart - and I feel sufficiently punished for dying by having to reload, that this works well for me.
I like "save on quit" systems, if the game is 100% stable. I hate games crashing in the middle of something and that's probably why I prefer quick save - and not because I can't deal with dying.
I think, also, that loading/saving is a meta-game mechanic - and I have no issue with it because of that. Since it's not happening "in-game" - it doesn't kill my immersion. I guess, sort of like reading for a part as an actor - until you get it right. It doesn't kill the actual movie or performance - because once you DO get it right, it works like it should. If a movie had bad lines, and just let the actor repeat them - immersion would very quickly die, which is kinda how I view the Fable 2 mechanic. There's no incentive whatsoever to play well.
When I play cRPGs - my ultimate goal isn't to survive and "get through it" - it is actually to do things in the most entertaining and satisfying ways. To me, that's about building a powerful character, fighting with cleverness, saving resources - and things of that nature. So, I reload when I feel I haven't done well - and typically not because I died.
By not having that option available - I wouldn't be able to experiment a lot, which can either be good or bad - depending on the kind of experience the game was trying to convey.
It's a hard thing to debate - because pretty much all games of all genres have little things that makes a difference in what would work best.
Something like Grand Theft Auto 4 - I HATED. It was awful having to redo the same thing over and over, because of the archaic checkpoint system. Quick-saving would have worked a million times better. Respawning at the hospital made no difference, because you still had to walk/drive all the way to the event again.
On the other hand, I liked that Diablo forced you to play carefully - and forced you to go back and recover your corpse. Why? Because I felt the game was possible to learn - and towards the end, you only died when making a mistake you could have avoided. Naturally, dying and getting back to your corpse to recover items is a bit weird - but for some reason it didn't bother me. Then again, I didn't play that game for its immersive qualities - rather mostly for the addictive loot/level mechanic.
In a game like GTA4 - they keep throwing you into situations where you have no way of learning them, except by redoing them over and over. I HATE that. I want a fair shot at learning something - and then it's quite alright to be penalised for not making it. But only then.