This is part of my post in the Save the Noobs thread, but it's also relevant here, so I'll put it here too with some additions:
I think that the balance of death to external vs internal forces is a little too skewed toward internal now: a lot of the stuff that can attack you has been nerfed and/or doesn't always appear. for example, I see new players often asking things like "am I ever going to get goblins attacking?" And I think the undead need a bit of a buff again. Additionally, I would make it harder to wall yourself off and prevent enemies from coming in. A dirt wall construction shouldn't be completely indestructible in my opinion, for example. It would be a bit much for things to be able to dig in at you, but I think there should be some circumstances where constructions can be unmade by attackers.
However, I think the whole stress thing is a little out of wack. Specifically, the fact that dwarves get stress from seeing the corpses of sentients, regardless of whether they are enemy or ally, is rather extreme in practice. I think it is right and proper for there to be significant negative thoughts from seeing the corpses of their fellow fortressmates, but the effect should be a LOT less for those who have to clean up a bunch of dead troglodytes, or goblins that tried to raid the fort.
Ultimately, It's Fun to lose because you got killed by an enemy attack, and it's also Fun to mess up when playing with water pressure and flood yourself or wreck youself with some self-made disaster like that. Unfortunately, it's not really so fun to have the thing that does you in be things like stress from having to bury the goblins, or a loyalty cascade that is completely inexplicable, even in hindsight. Or additionally, the inevitability of FPS death.
Maybe there should be an option to disable stress, for those who don't want to play with it in the game. That's a bit of a cop-out for the problem, though, since I feel like there probably is a way to have it in the game that makes it more fun to play, but right now, it's kind of like the money that existed in times older than these; currently it really only serves to make things frustrating, since It's not really fun to lose to internal issues like that. At least it shouldn't be nearly as common as it is.
In general, the problem with stress is that it's mostly a positive feedback loop with not very much of a counter-force, and that it gets disproportionately harder to recover from once it's already happened.