Apr 7th 2007 6:25PM Blizzard talked about this prior to the game going live. The intentionally made the penalty light so I doubt they will ever change it.
Their idea was that death should not be a large penalty so that a) you had fun instead of it furthering your grind (perhaps this is one reason they are so huge) and b) so that you *would* try things that might kill you rather than being scared. Again, so you could have fun.
Believe it or not most every decision I've seen them make enhances some significant portion of the game players gameplay somehow. Forum whiners not withstanding.