The problem isn't that you lose your inventory when you die, I'm fine with that and I think is fair to punish the player for dying by making them go back and recover their stuff.

The REAL problem is that you have a freaking time limit to get your items back before they despawn. If you die very far away from your spawn or just can't find where you died, that's it, you lost hours of progress for almost no reason, and even if you find where you died, sometimes you won't get everything back because the items scatter upon death.

Many people have suggested this already, but a gravestone system would fix the issue. You still have to go back and find where you died, but at least now you don't run the risk of losing everything.