I agree that the current system of total ship loss is too much. It encourages a game that is hardcore evasion rather than hardcore combat. This is truer than ever with recent changes to how is gained. However, death should still hurt. I would prefer to see a timer coupled with a repair cost in LP/HP. Something along the lines of 10-20% of ship cost seems about right to me. I hope we end up with something where players are not afraid to commit their ships, but at the same time still fear the sting of death to the point where things are not just being thrown away.
If your ship is disabled for 3 days, or a week, it hurts enough -- look at the progress of the region captures, as well as the pace of combat. This would only be heightened with a higher player base and the reduced XP gain abuse.
Another thing that I think can be done after removal of permadeath is to increase lethality. There is an old chart on the forums listing the chances for different types of special damage when a ship is hit. That chart included a chance at critical hit (i.e. double hull damage). This was either never implemented or was removed. I think that could go back in. I also think that when a ship is warping out there should be a slight chance that further engine hits might interrupt warp.
There is enough lethality in this game. Sol frigates can be blasted in 2 turns by Genari frigates with correct damage set up / dodging shielded sides
Its not really the frigates I am talking about. It is cruisers, especially the Genari T6 like Victorious III. That ship with good officers is so fast that it is essentially invulnerable unless the pilot is extremely careless or has very bad luck.