I agree with the sentiment that deaths don't automatically make a game hard.
However, they are a good determination of how hard a game can be. It's a much better metric than an abstract thing like "oh, I just have to redo this jump".
Also, a more challenging version of a game would generally be better to me as a whole. A recent example is Super Mario 3D Land.
Once I got through the first 8 worlds, I had over 100 lives because dying is hard, and not getting lives is basically impossible. At this point, there's no reason to even have lives, aside from the thing where if you die 5 times it ****s up your game save for the rest of its life.
The way it is now, I blew through the game in less than 10 hours (not to 100% the game, but to get every star coin). Paying $40 for a 10 hour game that provided no real challenge feels like a rip off. Now, if I had to restart stages a lot more (provided by difficulty and dying; actually making me use those lives I had stock piled) then I would probably have spent much more time with the game.
Also, once I fully 100% the game, the only thing the game is good for is speed running, but even then, anyone can speed run this game. The deaths would add an extra layer of skill that speed runners could use over non-speed runners, such as me. There's very little replay value, because there's no extra game modes or difficulty levels, it's just the base game with easy difficulty and generally only one path to go through the game.
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http://last.fm/user/ShadosNeko