I say drop everything. It's survival. If you die in DayZ, you start over, same should apply here. Your goal is to survive the elements, and you don't get second chances in most cases.
That said, if you have a point-shop, points should remain throughout death, with maybe a small point incursion for deaths or REALLY bad forget-ups (like hitting another hunter maybe?)
ninja(was 2 slow) edit:
that hunter-kill idea could actually work as an honor system. Take for example, no admins are on for 5 hours, and one comes on. The server is in shambles, people are saying 3 people have been intentionally killing other hunters. The admin pulls up the server list, and sure as stuff, these three people's scores are well into the negative numbers. There is no going back for them, they are royally fukt.
Ofc, this is assuming PVP is enabled