I do think that it's okay for players to get wiped out. It has to
be possible, or players will have no fear. The game shouldn't be
"The GM who would never kill a PC."
On the other hand, I do believe that there are ways to structure conflict
and provide domains of power such that it isn't practical for one player,
or even group of players, to "take over" the whole game. We're talking
about open-ended games, after all. If someone can "win", then it's not
open-ended, by definition.
If your goal is to eliminate every other player from the game, then you're
not going to enjoy an open-ended system. But there are plenty of games
where the goal isn't killing other players. Imagine a political game,
for instance, where no one player ever has total control, and the power
of politicians rises and falls over time.
Such a game could even have killing -- you hire an assasin, at great risk,
to take out a particular political enemy. But you can't just kill all the
other players in the game and declare yourself dictator. It's just not
provided for in the rules. Does that mean the game "is pretty limited"?