IMHO - respawning is detrimental to most story driven RPGs. See: Infinity engine games and other A/D&D games.
I believe the dynamic of story driven (non-Action) RPGs is about linking the growth of your character to discrete steps taken either directly relevant to the story or on the periphery of the narrative. Admittedly even Infinity engine games included a limited opportunity to create random encounters during travel between locations, but these events were wholly irrelevant and became only minor inconveniences mid-way through the game. If D:Original Sin inherits this feature, it won't be to the game's detriment.
My personal opinion is that respawning is a trait of Action RPGs like Diablo and MMORPGs which are about loot farming rather than overarching story.
In more advanced RPGs, where the role playing has a more significant component, story mission rewards outweigh random loot or monster drops. To those familiar with NWN2:Mask of the Betrayer, BG2:Throne of Bhaal or Planescape Torment you would have experienced, significantly in the case of the latter, that killing an army of Baatezu pales reward-wise to rubbing and absorbing the Bronze Sphere. I believe a story-driven experience analogous to old school RPGs if implemented in D:Original Sin would outweigh the time spent implementing mechanics for grinding for loot.
Additionally - I'd like to point out that these mechanics are not unique to Black Isle / Bioware / Interplay, but that Troika (e.g. Arcanum, Pool of Radiance) had a similar approach. And further were also successfully implemented in non North American RPGs - e.g. the Gothic series - a game where nothing respawned at random (this to present a counterpoint to Elder Scrolls mechanics), and the game was enhanced as a result.
As an aside - one of the best experiences I had in Gothic was as a very low level character exploiting the terrain to jump to a hard-to-reach ledge and spend 5 mins peppering a Troll with arrows. The troll had no recourse and died. I levelled up (maybe even twice!), and got some "phat lewtz". The game for me was enhanced by this clever exploitation and trickery, not diminished. Because I would take more time to explore the area and find "cheap shot kills" to gain early rewards, rather than if the trolls respawned: "Oh, I'm now 10 levels higher than you, I'm just going to mow you down for random garbage".
