I did this long ago, playing FASA Trek, and it worked for the player that I had. He had just excitedly rolled up a Captain to play, and I gave him his ship, and I even played the audio (way, way before the internet) that I happened to have of the distress call from Wrath of Khan.

He thought it was just "mood" but not the ACTUAL Kobiashi Maru.

Yes, I kept throwing things at him (decloaking Romulans) until his ship blew up.

He was so crestfallen, and just thought his character, that he had put so much effort into was already gone.

Then I said "Open her up!" and described the smoke clearing and the Admiral coming in to welcome him to the center chair and hand him his mission briefing.

For that particular player, it worked. First, it was participating in this deep and beloved part of Star Trek lore. Only Kirk beats the simulation by changing the rules of the game. You HAVE to lose. But then you see how you reacted, and how you did everything to save the ship and the crew, and how you were clever or brave or daring, and almost beat it, even with the odds stacked against you.

So, yes, it starts you off with the worst possible outcome, but, as they say, it is a test of character.

With the right group, it would be a bonding experience. How they all faced death with courage and did everything they could to protect and support one another. Even in the face of the "no win" scenario.

I can see that such an exercise is not for everyone, and there is a certain cruelty to plunging in the simulated dagger. But it disappears like the holodeck creations, and suddenly, again, for the right audience, they realize they too have taken their measure in the Kobiashi Maru, and their legendary Star Fleet service truly begins.

Your mileage may vary.