I've always tried to be nice to my dwarves, for as long as I've played DF. I actually mostly play pony mod now, which may affect the way I treat my virtual citizens, but when I played dwarves I did as much as I could for them.
They always get personal 2x3 or 3x4 bedrooms that are smoothed. Each gets a bed, cabinet and chest, even though giving them cabinets can be an FPS drain over time due to hoarded clothes. If any of them are unhappy for any reason, I do what I can to help fix that. I even had to recruit one because she was very unhappy at her lack of pants, and stuffing her in the military was the only way to get her to put any more on.
I hate losing citizens. Even if they're soap makers, if they die I get unhappy. I get extra unhappy if it's my fault something goes wrong, such as a poorly designed engineering attempt or sending them out to cut wood without military escort. I do attach value to a dwarf based on their skills and usefullness, and losing dwarves with lots of an important skill annoys me more. Especially soldiers. It's partly because replacing them is a hassle. If new dwarves just appeared to replace them without any effort on my part I wouldn't care nearly as much, but that's not so different from real life I guess. You don't know what you have until it's gone, right?