Because I need a job lol, but on a serious note also because that was a large factor from what I remember. Restarting from the beginning when your character dies seems unforgiving, but it also would force people to play smarter and adapt, and it also is a consequence for not being careful. If you just kept your items, then there'd be no real challenge you know, no real threat or risk. It gives you a reason to be orderly and care about your life there. 

I WOULD assume that there may be limited storage in our homes, but anything we have in our inventory upon death would be lost and up for grabs.