The system could work like this:
Every demigod has a bounty on its head. The maximum bounty is the current death rewards we have right now. When you die, the bounty is paid out and then halved. If the demigod is killed instantly when he revives, he'd pay out half as much as he did the last time. When the demigod comes back to life, this bounty slowly increases back towards its maximum. If he gets a kill, it's instantly refilled.
This system wouldn't make it "okay to die". It would only affect people who die very frequently, people who right now are a drag on their team and just make the game unfun for everyone. Anyone who died enough to take advantage of this system would spend so much time respawning that the enemy would have a lot of map control advantage anyways.
I don't know why there are very few (any?) RTS that use this kind of system
There also aren't very many RTS games where your enemies get paid extra resources if your ally is bad. Demigod has a double-whammy in that you not only have a bad player on your team who won't be very helpful, but your enemy actually gets more resources because of that.
I can (easily) win a 3v3 game in Warcraft III with a sucky ally if my remaining ally is very good. At demigod? Forget it.