I'm a relative newbie, and still remember my first potential Pkill situation. (I've never actually fought a PK, and frankly, I'd prefer to keep it that way, unless something comes up in RP that really justifies it.)
Raona was fighting orcs in the Snowflake mountains when a really BIG orc came along and started bullying her around (in impressive RP manner, I should add. Positively orcish!). He was understandably mad at her having offed a member of his tribe, who he said he was training for re-conquest of the realms. I think in the end he offered to let her go if Raona would eat some dwarf jerky, but she wasn't having any of it. Her attempts to out-talk the orc didn't work...she was talking over his head. There was an OOC chat about PKill, in which the orc patiently explained to Raona how it should work. Then there was much smoting of drawing back, looking behind ones shoulder, getting out a huge club, whistling for a horse, and then, finally, the orc took a swipe at Raona...which nearly crushed the life out of her. (30% health) Let me say that had Raona died from that single swipe (and that was possible, both IC and code-wise, had an unlikely miss in the multiple attacks been a hit) I'd have been pretty frustrated OOC. Really OOC frustrated if an obviously superior character had taken any of the little she had. Raona was clearly trying to arrange a way to run, and took up a defensive posture with her smotes. I did feel I had to give the orc a shot at her, but when it was her "turn," she ran like a bunnny. The orc gave chase, but let her escape. Raona is still haunted by that encounter, to this day, and hadn't returned to that place until just this week, and that was with a group on a mining expedition.
So, to my mind: The orc played things admirably, IC and OOC. It was a credible drubbing, and cowed Raona just as her death would have. It wasn't "unfair" for a high-level character to stumble upon a much lower-level character, and act orcishly. It wasn't unfair for Raona to run. (She wasn't a squire then, just a kid. Today...not sure what she'd do.) I'm glad, ICly and OOCly, that Raona got away. She doesn't plan to go hunting for the orc when she grows up, and get revenge. I've run into that orc again, in fact, and each time look forward to more great RP...and um, yuck, Dwarf jerky!
Bottom line: Whatever rules we may put in place, good players will make the game work under them, and poor players will work around them. This is not to say that the rules should not be made to favor good players as much as possible. I think poor players often enter into PKills hoping for, or even scheming to get, particular items. But good players might enter into PKill for the same reason: as when various evils were chasing after Maybel trying to obtain a rather precious mace, as part of a larger RP. They didn't care about Maybel, they wanted that mace, and to stymie what it might accomplish. I see two ways to deal with this, but it rolls back to my original point. If there were a no-item-take policy in place, and a good player like Maybel were killed by others trying to take that mace, she would then give it to them; to satisfy the RP.
To my mind, the real question is whether FK is better letting all play, even those who have time and again demonstrated poor RP and no hope of getting better, or whether more proactive banning of those who just don't "get it" would be a net positive. I used to be firmly in favor of the former, but the longer I am around (and run into more truly poor, boorish, and hopeless, it would seem) players, the more I see the appeal of the latter. But it does seem awfully snotty, in a way.
Golly...how did I end up here? Well, that's what I think, I guess.

Maybe it belongs in a whole new thread. To the original question, I don't see changing this rule as really fixing anything. Poor players will start holding corpses hostage or come up with some other way to twist things to their idea of how things should go. Perhaps it is good that most of them currently seem sated with "just" one item.