I would think so, yes.
In fact, if it’s a pay for play game, it would open up a whole new revenue stream.
Obviously it wouldn’t be worth it to kill off a Level 1 character. On some of those games, if you’re a Level 60 character and get killed off, at worst you’re a Level 59 character when you go to play again. But let’s say there’s a “superkill” routine that eliminates your character entirely or puts you back to Level 1.
The question is, would the player be discouraged, or just try again?
South Park has an epi on that. World of Warcraft maybe?
Player goes around killing off all the other players, Cartman rallies the gang to spend all their waking time killing off 1-point animals to build up their characters to go after the dude en masse.