I think that if you want to play a game for 60 years, long enough for your character to go from 20 to 80 years old to die, then sure, let them die.
Characters dieing is heavily against the idea of continuous development through attributes. RPGs are heavily based on your character, not your personal skill at playing the game. Doing this would take those who play a lot, and cripple their character greatly. Most people probably won't even want to play because all they work for ends up dieing... of old age. Even if you do get to start over again, that just means you're starting over as a stronger newbie, doing the same crap as you did before, but getting a bit farther this time before you die.
The only time the characters should ever die off completely besides when doing a "hardcore" type setting where death is permanent is if you cleverly implement it into the gameplay where, for example, you have to sacrifice yourself to the gods, but you are re-incarnated at a completely new world. You are weaker, yes, but the game play is not the same - you don't do the same crap as you did when you were this weak before since it is a totally new world. If you have any type of PvP, though, you have to allow people to build back up to their original strength quickly or else those PvP lovers wouldn't want to sacrifice them self.