this pretty much already exists (ZHP/TGFP/probably TAFU too)

there isn't really much wiggle room between "die horribly" and "virtually untouchable, which makes it kinda boring at times.

Here's the thing: You still go back to level 1 each time. Your stat growth will be higher, but you will still need to kill some enemies to level up before you can handle the more difficult enemies.

Of course, this can be mitigated if you manage to keep some good equipment (assuming that's possible) or if you manage to absorb some stats (but that would mean you've reached max level at least once), but it still is a factor.

In other words, death would have a short term penalty, but a long term benefit.

It may work good on the first or second time your died, but after the 10 or 20 times you died the tedium of fighting the same enemy and story over and over again sets in. Because it is a turn base game, you will be using the same successful tactics to beat the level, over and over.

It will be different from Rogue Legacy, where as a platformer, have a higher level of engagement than Turn base game which you already how to beat.

If you are aiming for fun the 1/2 times you dies, why not just load the game to the point before you died? Restarting from level 1 to level 99 would be...... very grindy unless you can host a huge selection of different class, skills, enemies to give the player to try out.

Here's one thing about roguelikes that is different from typical turn-based RPGs; combat (in cases when you don't need to think) is much faster. In traditional ASCII roguelikes, for example, all you need to do is walk into an enemy and you automatically attack it. In Mystery Dungeon games, attacking is just a matter of pressing a button to attack, just like in a typical action game.

As a result, if you are massively overleveled relative to your enemies, you can kill them quickly; each enemy takes only a split second. Things only slow down when you actually have to think. (Of course, in some roguelikes, you may need to be careful about rushing too quickly, especially if an otherwise weak enemy can do nasty things to you.)

(As a side note, it is possible for an SRPG to do combat like this. The Disgaea series does not, but the Arc the Lad series, for example, does, as do the Gold Box games; in the former, attacking is just pressing a button, and in the latter, running into an enemy makes you attack.)

I remember pressing "X" to attack in Arc the Lad (and you better position yourself at side or in back of enemy), though I can see how running into enemy could work in SRPG.

I didn't mind how it was done in Torchlight I. You could heirloom some item to new character, and that heirloom would get higher stats with each newer character it being heirloomed to. Thus you don't reward dying, and you have legacy things which help you on new characters. Funny thing, Torchlight heirlooms had some bug, which made their stats growth exponentially, so you could easily reach overflow.