LogFAQs > #968509199

Honestly that's a pretty insane game over. Your death in that game not only results in your failure to awaken Zelda, but also revives an evil demon that needs your blood to come back to life.

I remember reading somewhere that the reason random townsfolk sometimes attack you is because a large section of Hyrule believes Link's blood is too dangerous for him to be kept alive in case his blood falls into the wrong hands. So they intend to kill him themselves and burn his body to prevent Ganon from returning.