Players should only drop their diablo-style equipment inventory, once that is added, upon death. Their blasters, armor, whatever Schema adds for that. Their space suit too, if that is both an switchable item and you either have a \"default suit\" or undeathinator and spawn locations are altered to be safe to suitless players.
By all means, players dropping building blocks would be great as an OPTION, as you indicated. Leave if off by default though, normal servers tend to outnumber \"hardcore\" ones. Make it easy enough to turn on for servers that do want it.