I'm someone who likes "bad ends" in a lot of games, honestly. And I'd be lying if I said I wouldn't be interested in a few meaner "get dominated" scenes for loss in MGD, just on a personal level.
But I can definitely appreciate a different approach where loss is just a very temporary setback. I think it's a good design decision. Plus, the folks like me who like rougher, meaner stuff have other sources of that content anyways.