Just one thing to add to the list of how perma-death can work: just think why it works in real life. I mean, why are we inclined to work together in real life rather than go on random murderous rampages? It's because there is more to gain from working together than killing each other. Often our survival depends on cooperating with other people. If the game manages to simulate that fact, and rewards the players generously for working together, then you have all the foundation for a real in-game society.
This is only half the equation - yes, people tend to work together in real life because you can accomplish more then working alone.
However, the other half is there's a real consequences for being a dick IRL - not so much in a video game you're not taking seriously. What does the griefer have to lose? nothing. He does not care about his character, or his town, or the time anyone spent doing anything - all he cares about is ruining your day. So what if you catch him and lynch him (or whatever) after he kills 5 people and burns half your town down? He does not care he died, he will just make a new guy and do it again till he gets bored.
F2P means they can't even make real consequences. Ban the guy? oh well, he made a new account.
Sure, most people will work together with just the first half - but there's always the troublesome minority that needs the threat of punishment hanging over them in order to behave, and there's enough of them out there to make things miserable for everyone else if it does not exist.
First off, there are some people who want to "go out with a bang". They say, "I don't want to play any more so I'll ruin everyone's day". They may be able to go out and kill a few people. They do the crime with no punishment, fair enough, but it might as well be a perma ban since they leave the community.
Everyone else, however, is subject to a loss (generally pretty substantial) of stats and learning points. In the newest version of HnH, LP are pretty valuable. It isn't AS easy to just farm up a perfect combat character. If a group decides they want to grief, they have to accept the fact that they will lose valuable equipment and LP, period. Fighting is expensive in HnH, even if your group is top dog.
The reason fighting is so expensive is because there are a bunch of protections put in place. Each protection decreases the population that can fuck you over more and more. First, people need the trespassing skill to cross your land if you have a personal claim, so if you put up a personal claim you limit the people who can get to you. Next, if you put up even a basic, simple wall, people require the vandalism skill to get to you, further limiting those who can harass you. Upgrade that to a palisade and how they have to have those skills and a huge amount of strength or build a ram. Brick wall? Now their only option is a ram.
Each of these protections represent more and more of an investment required on the part of the "griefer", more and more that they are not going to want to lose. Also, Vandalism leaves a sent so "rangers" (kind of like volunteer anti-griefers) can track these griefers down and kill them while they are logged off.
It is also worth noting that if they do set up a ram they have to wait 24 hours for it to dry, giving you time to assemble a defense.
But even with a system this good (or convoluted) it is possible to lose everything to some asshole, and that sucks. But it isn't like it happens all the time. I think I have played a combined total of at least 6 months (don't play anymore) and never came across someone who tried to gank me or anything like that.
That being said, if a player isn't taking advantage of the most basic rules of security than they really do suck and deserve to die. People aren't griefing them, they are simply being stupid and trying to play the game in a stupid way.
Those goblins are not griefing you OR over powered. Build some damn cage traps and protect them dwarves!