I don't mind dropping my gear, even when sometimes you won't be able to get it back, that's a fine punishment, but I agree the skill loss is too much. It's why, when I'm one hit away from death, I slap ESC then F5 then type God and run away from the fight saying "yep... that was a death"
As soon as I'm safe I toggle God off and keep playing. I thought this would make it boring, but in truth I hate resorting to that so much that I find myself playing more cautiously to avoid it. In addition, since I don't have to waste hours on recovery, I've gotten better at fighting and timing parries.
Judge me if you want but I'm already ok with it.