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"Are games that feature permadeath and permanence more fun or frustrating?"
If they implement it as optional, like in Diablo 2-3, or they create a solid permadeath system that goes well with the gameplay and the overall tone, like in DayZ, then I'd call that a welcome feature. I also can't wait to see how CCP is going to handle the permadeath feature in World Of Darkness MMO.
Back in the day, you could collect lives. No more lives = no more continues and start all over!
I loved it that way.