Experience debt: an alternative to skill loss on death

There have been a number of posts here and elsewhere regarding the skill drain mechanic, where you lose 5% of your skill levels every time you die. Proponents of this approach argue that it's a valuable method of ensuring that death has a meaningful penalty, thereby increasing the motivation to play skillfully, to plan ahead, and to avoid death. Opponents argue that at high levels, a single death will undo many hours of progress, that the time required for a corpse run (as well as the risk involved) generally provides sufficient penalty, and that it discourages players from being willing to take risks.

I personally find myself more aligned with the latter camp, and will likely end up drifting away from the game if the mechanic stays in place, although I'm still having quite a bit of fun at the moment. However, I appreciate the need to impose a meaningful death penalty in order to discourage various cheesy tactics and to encourage careful and intelligent play. So let me propose an alternative mechanic that I think might be satisfactory on both counts: experience debt.

Rather than losing experience when you die, you incur some amount of experience debt in each of your skills (perhaps some multiple of the experience needed to reach the next level in each of your skills). Until the debt is paid off, only half of earned experience goes to increasing your skills, with the other half being used to reduce the debt. In essence, rather than losing progress that you've already made, your future progress is slowed down.

Given appropriate balancing, the overall effect would stay the same (i.e., time to go from 0->100), but I think it would feel a little less punitive. You'd also avoid the positive feedback loop of dying, becoming less effective, and therefore even more likely to die (which is, IMHO, poor game design).

FWIW, this is pretty much how City of Heroes handled getting KO-ed and it seemed to work pretty well there. The fact that you still drop your inventory and have to go on a rather dangerous corpse run should keep most players eager to avoid death when possible, but hopefully this approach would still allow a little more freedom to take some risks.