EDIT I noticed some posts saying games were too easy, since anyone can finish these games, therefore death is not meaningful (clicked on the old posts by accident). This leads into one of my pet peeves about games which don't offer good value for money unless you're super-skilled.
While I'm all for meaningful death, there's an equity issue here that hasn't been resolved yet (it's inherent to games as narratives). Imagine if you were watching a movie, and at certain points, the movie would stop, ask you to do some sort of puzzle, and if you failed, the movie would turn itself off and go "fuck you! No movie for you" or in the case of a "dynamic" situation "fuck you, only <bad ending> for you!"
While "death = game over" was never a problem for short arcade games or 1-on-1 multiplayer, once games because quite lengthy narrative devices, the idea that the game locks you out of seeing any more of the game if you're deemed too shit to be allowed to continue is not very equitable. Remember, the person being locked out by a difficult challenge paid good money for the experience. Saying "sorry, fuck you, you're too shit to continue. Go play something else, and btw, thanks for the $100" to that person isn't the experience they paid for.
The basically reality is that riduculously hard challenges are basically flippin' the bird to almost your entire customer base, to pander to a tiny hardcore legion who'll play your game and move on to the next thing in no time. I'm for a dynamic level of difficulty, at least as an option. I guess some people will finish the game who "didn't deserve" to see the ending, because their skills weren't so leet. But fuck that attitude basically.