Hardcore mode exists because Diablo is, at it's core, a Roguelike. Roguelikes typically feature permadeath. This is just a way for people to make it more of a true roguelike if they want. This is also why the default keybinding for using a potion is "Q." That's what it was in Rogue.
I also totaly get the appearance thing. I'll sacrifice stats in Xenoblade just to have my characters look good. It helps with immersion.
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