In Sword Art Online, why did Akihiko Kayaba make the game so as to make death permanent? Don't get me wrong, I know that in episode 1 he claims that he would like to "control this world's fate". However, in episode 17, when he says that he "wanted to make a world free of laws and restrictions", then why make it so that people must die in real life as well? Wouldn't that make a real death contrary to his goals? And if he "forgot" somewhere in the middle of the game (as he claims in episode 14), what is the point in continuing further? Has he no regard for human life?
Okay, this question raises way to many personal opinions and speculations. It's never explained why perma-death was enabled in Sword Art Online. We'll also never find out since Kayaba Akihiko died.
First, I'd like to note that the perma-death was neither a law nor restriction, it was a rule, and thus Kayaba Akihiko did not go against any rules he set for SAO. Obviously, a game will have rules, so you'll have things like: death, no flying, max health, etc. What Kayaba Akihiko was referring to was a world without the laws and restrictions placed by the society in real life. That's my speculation, but that's all it could truly point to. Naturally, there are no laws or restrictions regarding death in SAO or IRL, but rather it's a fundamental rule.
From Kayaba Akihito's entry on Sword Art Online Wikia:
Kayaba Akihiko had little to no empathy, with no regard for human life (including his own)
Akihiko seemed to be very sincere and thoughtful, as shown when he told Kirito of his dream about creating a floating castle as the basis for creating Sword Art Online.
In spite of this, Akihiko had a level of honor and fairness. [...]
If you look at those three lines, we can also take something else from this. At the end of Sword Art Online Asuna dies, right? Wrong. Kayaba Akihiko made the promise to Kirito to prevent Asuna from committing suicide before the match was over (episode 13). He made this promise because he is both sincere and fair. Therefore, while Asuna did indeed die in the game, she didn't die in real life because of the promise Kayaba Akihiko made with Kirito. This is also why, as promised at the beginning of the series, all 6147 players were returned to the real world after Kirito completed SAO. Quoted from the anime: (Kayaba Akihiko) "Moments ago, all 6147 remaining players were successfully logged out."
Getting back to the point, everything Kayaba Akihiko did was not contrary to the goals he set and had in mind through out Sword Art Online. Everything fell into place and he didn't violate any of his rules. He fulfilled his dream and simply brought others into it, the idea was that Kayaba Akihiko wanted to replace the real world with virtual reality for himself. This is shown in the anime episode 14 at 18:41, when Kayaba Akihiko said, "I wanted to leave the Earth behind and go to that castle. For a long, long time that was my only desire." Naturally, since he made the game available to everyone, the rules he believed in and set for himself would have to be followed everyone else as well.
As Kayaba says (I doesn't remember when), "There's no difference between IRL and SAO." If you die, it happens on both ends. I think it was to induce psychological effect.
In Volume 1 - Chapter 24 of the light novel, during the scene where Kirito and Kayaba had a talk before they returned to reality:
“…What about those who died? Both of us are already dead, yet we continue to exist here. Doesn’t that mean you can return the other four thousand dead to the original world as well?”
Kayaba’s expression didn’t change. He closed the window, put his hands into his pockets, and then said:
“Life can’t be recovered so easily. Their consciousness will never return. The dead will disappear — this fact remains true in every world. I created this place only because I wanted to talk with you two — one last time.”
The difference is "a world free of laws and restrictions". You can change or remove some restrictions. For example, in real life, you cannot fight continuously for 20 hours, nor can you jump more than 20 meters. You can change some laws or some restrictions, but there are some basic things that you cannot change. Or, at least, you need some time to gradually get used to it.
Another example are Asuna's words. She told Kirito about male and female genitals. They weren't present in early version, but because of psychological effect, they were added in later version during Beta testing phase, but without any hair (because lack of effect, I think).
You can read this in Volume 1 - Chapter 16.5 (this special is in the web version only):
There is a somewhat interesting story concerning all of this (I apologize for digressing, but)... When SAO was under development, the Argas company had an internal closed alpha test phase during which time they reasoned that since players would have no use for genitals, it would not be necessary to objectify it.
However, in reality they found that most of the male testers would experience a certain amount of severe anxiety. Even so, while there was no problem when playing for several hours. When they conducted consecutive tests over a 48 hour period, they found that most of the male testers who attended this trial period were unable to stand not having their genitals and gave up. So it was from the Beta testing phase that the genital parts were implemented out of a sense of necessity. It seems that this was also part of the reason why SAO players were not allowed to change their characters' genders.
However, even if you had your genital parts, the question that I had prior to the official start of the game (meaning, before the incident) was whether or not there would be anxiety over the lack of proper function. I myself had agonized repeatedly on multiple occasions over the inability to release my pent up energy, but now I saw that if the ethics code or whatever was disabled, then functionality, probably even ejaculation was possible.