every time I die I just cut my heart out and eat it, but that's not really punishment enough since it's so frickin delicious.

New to this thing called video games, eh?

Just because you want it doesn't mean everyone else does. I love how you can save anywhere and whenever so I have my back covered.

Playing Dead is Dead sounds like a good option, as long as you can trust yourself not to cheat Op.
Well, until a hardcoe mod comes along with the right mix of options for you.

I was going to suggest that you could rip up a fiver everytime you die, but I think that's planned for the next DLC.

It is a single-player game, so a penalty for dying is absolutely unnecessary. It would make people quicksave/quickload mid battle, before they die, in the middle of their death animations, etc etc. I think dying and loading is more than enough punishment, losing gold would just be silly. There is no respawn in Skyrim, if you're dead you are dead, why put a penalty there?

My followers must think my Nord Brute is the best lock picker on the planet; they have NEVER seen him fail to open one (thanks quick save)!

You answered your own question. Play that way, others can save when they want.

I wouldn't do dead is dead because a) I have other things to do in my life and the combat system is still too cheap. You can end up a victim of bad play mechanics.

As for realism of design, I agree that it feels dumb to have a game where you pretty much can't get through an area playing well, that all traps are lethal and you will die when you trip them.

Certainly you play more realistically when you aren't relying on saves to back you up or abuse the mechanic by taking on long odds and doing it a hundred times until you impossibly win.

Knowing you have the save crutch can feel less immersive but knowing you can be screwn By bad mechanics is worse. Rember how frustrating racing was in gta4 when you had to load, get brucie, get to the track, race and lose because the cars handle like they're on ice and you lose control? It doesn't even feel like you lost because your skills aren't up to it, it feels like bad controls, bad design. And playing it a dozen times to beat it does not feel like realism.

You do, it's game over.