But why can't bethesda just implementing a special feature that when a person in the town dies a new random gen'd person is created in their place with a new random gen'd name. So you know it happens they could add an obituary slab in town's you can go to see who died that week in that town and also see who moved in to town recently. Now you still get vamp death squads and the towns don't become desolate.
edit: of course they will need to implement rules for rng of the villagers so that the dialogue needs will always be kept. Like a particular quest can only be given by argonian female then the rng will always gen a argonian female if that quest's giver dies.