Hopefully it also removes the tactic of having a "runner" in the group. While tactically effective, it made the game less fun in my mind since nothing was dying.
I agree with this. I never minded the frequent and habitual death and resurrection of heroes - that disbelief can be suspended easily enough in a world where magic is commonplace, however, I wasn't very fond of the way death had few (if any) lasting mechanical consequences. Suicide runs were all too frequent for my taste, and the worst part of it was that the heroes really needed to use that tactic to maintain their fighting edge. If you had the CT to spend, it was a downright practical move.
That said, I'm not entirely fond of the fluff idea that heroes only get knocked down, as the OP mentioned. I like how it gives "death" a bit more meaning - you can't afford to run into a room full of monsters because your hero will stay there and stay weak if he has no support. I dislike the idea that a dragon can only knock you over and not bite you in half, though.
However, I choose to see this not as a flaw in 2e, but rather as an opportunity to play with house rules. Perhaps a rule that if a hero gets attacked while he's KO'd he gets killed for good. Potentially with the option to have the party resurrect him after the quest is finished (for a reasonably high cost.) Of course, being a fan of roguelikes in general, I also find the idea of permadeath somewhat enticing, though I suspect it would make the game quite hard for the heroes.