We actually have lost a number of FReepers, but their profiles are still active. Personally, I like the idea of keeping the profiles. You never know when FReepers of the future might be going back and reading old threads and want to know something of those who did the posts. Might not even be FReepers, for that matter. What I would like to see, however, is that after a FReeper is known to have passed on, have the mods go in and do a modification on the profile page that would reflect that. ...like maybe a different color theme for the page and a date of death.
The Memorial Wall
http://www.freerepublic.com/memorial/memorial.htm
Their profile pages and tribute threads.