You guys all present valid points, but none of them are why I support character death. I firmly believe the plot and setting should be the strongest elements to a roleplay, with setting dictating plot and plot influencing characters. That said, I come to some conclusions:
A Kage-level nin serves a purpose. If they are to kill a random-ass Genin, it best be for that purpose, elsewise the moderator or roleplayer controlling that nin is just being a cunt and abusing power.
There are times when the setting can accept a beatdown from Hell. There are times when the character should die. If you're in a war and you're outnumbered and outclassed, chances are you're going to die. For example, if 3 genin and a Jounin are in a fight with 2 Jounin teams, chances are the first set are fucked because they're literally outnumbered. A Jounin can't effectively fight two (often) and the genin are just plain outnumbered. If the roleplay is balanced correctly, chances are one or two if not all of those genin will be slaughtered due to the effects of wartime and that Jounin is going to escape and probably not be given another team. There are some characters with honor and morals, sure, but overall in wartime soldiers kill, and shinobi truly are just glorified soldiers to some degree. It would dilute the plot and thus mar a setting to just let characters who rightfully are fated to die... live.
No, not all fights are fair. Look at how the Second Hokage died. Mother fucker was out numbered by twenty of the Kinkaku squad. Think that shits fair? No. It's not, but it happened. Your genin gets into a scrap with a chuunin? You best hope to god he can either outrun that mother fucker, he's got allies closeby or there is a REALLY good plotted reason that chuunin wouldn't kill the genin.
That seems unfair and totally exploitable, I'm sure. That's why it is the job of moderation and the roleplayers in charge (jounin for example) to work together to avoid those situations, if they can. If some punk roleplayer wants to just stroke his ego a little bit and kill off some PC's, chances are he will be dealt with in an acceptable manner as he was toxic to the roleplay. But, if someone played their character correctly, to their personality, to the plot and ended up killing someone else's character, I see no reason to reprimand them. Every situation calls for different actions and it is the goal of a roleplay and its community to not allow such grievances to happen.
Lastly, character death has a fuckton of benefits. Impact on other players, added plot depth, more reality, the chance for players to make new characters and keep relationships refreshing, and I personally believe character death is one of the single best illustrations of the passage of time in a roleplay.