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The issue of whether or not failure is something that should be included in an MMO is today's hot topic of discussion The Devil's Advocate. No matter what side of the issue you fall on, you'll want to read this piece and then hash it out in the comments.
What this basically means is that, if a boss in a raid run through the Raid Finder feature trounces your behind, you get stronger, with the hope that your increased capabilities will allow you to trounce the boss within 9 more tries. After the 9th boss death, you no longer get incrementally stronger.
Read more of Victor Barreiro Jr.'s The Devil's Advocate: I Failed... Now What?