I believe Save or Die's intention is to create the mood of a good horror film/novel, it's about building suspense. Knowing that jewel shoots an adventurer disintegrating death ray builds suspense, makes you real cautious as a mistake can have the party carting your ashes to the nearest temple. But when you randomly drop dead without much control, your adventurer feels more like "teenage girl no.3 who gets murderized by masked killer" than "gritty pulp hero"
It's that line between good horror suspense and cheap shock (although goofy slaughterfests can be fun if that's your intention, as long as everyone knows they're on the same page) which is trick to aim for. That's the main problem with SoD as it is in D&D.
Another issue is, in the hands of the players, the jarring effect of a % chance, even a low one, of instantly ending a conflict on turn one. Hit point damage is nowhere in the equation. If a Fighter spent 4 turns chipping away at the evil baron and on turn 5 the wizard's finger of death succeeds, it doesn't matter if he was at 100% or 10% hit points, he just dies. It makes the fighter's damage feel wasted.
Here's my shot at keeping the suspenseful mood save or die while integrating it into a holistic D&D party experience:
'Save or Die' effects will do hit point damage to characters above 50% health, but when targeting a bloodied opponent THEN the chance of instant 'death' occurs.
In this set up the Fighter whacking away at the dread lord is actually a requirement to set up for the wizard to deliver a big fight ending spell, cooperation! 'Save or Suck' can have similar effects. Say Sleep, it could be in it's 4e form against perfectly healthy, strong willed opponents but when cast against bloodied, strained foes it takes on the power of its AD&D incarnation.
The angle I look at this is that this gives Bloodied a meaning beyond "50% of your health". What this does is, if the enemy can exploit it, make bloodied the feeling of being down to single digit health, the next hit can drop you and you're desparate to survive. This of course can apply to effects other than magic. Say an Assassin's death attack, or a Fighter disarming his foe. The fight-ending power is kept intact.
Say a Warrior has 40 hit points total. That means he has 20 points of "heroic luck" up and running, while the next 20 are 'violins are rising' danger zone. But enemies that don't have SoD's, say goblin goons, aren't going to be one shotting you, SoD is something in the hands of big bads and the most intense dungeon rooms. Because hit points n' damage dice are so meta-gamey in the first place, we all have our set expecations of what 1 to 100% means. You could view this just as easily as "the hero has 20 hit points until he's at death's door (vulnerable to a death attack), but he has 20 extra to less severe wounds". Or if it was worded "You have 20 hit points, but you can fight until you're at -21, but when you're in the negatives a SoD can drop you immediately", functionally it's the same thing, '40 points of fighting, 20 points of vulnerability' but the wording changes your perception. That's what I mean by expecations, so I ask of you to perhaps adjust your current expectations to see how this rule would set hit point numbers to mean something a little different, yet still expressing the same basic idea.
The heroic stand of the warrior, hewing through goblin minions (gameplay: he's been dropped to bloodied but the gobbos don't gain much of a bonus for that). The Death Knight strides towards the warrior, their blades cross and he cuts down the hero in a single blow with his soul crushing blade (save or die).
That's the kind of imagery that I had in mind when making this mechanic. The tense moment, like taking a step into a dark room, the tense moment of your vision adjusting to the darkness (do you really want to see what's in there?) is what I want players to feel.
*an addendum: On keeping minion type monsters, it could be that foes that are under your level by X amount just count as 'bloodied' for the purpose of your various abilities. So the Wizard can still put those goblin sentries to sleep with a wave of his hand and the Fighter can crush them in swaths, but they won't be one-shotting their hobgoblin boss so easily.
*On the concern that front line warriors may be unfairly hosed for this new lethality added to Bloodied:
Warrior types who have the durability to shield others already have higher hit points/AC to begin with, they have more 'heroic plot points' to whittle through compared to anyone else.
There's also other elements to be fleshed out that exist with such a mechanic. Everything following is just quick thoughts, yet to be fully fleshed out:
Say, if going full defense, even when bloodied, makes you count as a 'non bloodied' state. This is like a reverse way of doing "target is dazed/stunned", but it's based on player choice to take that penalty and the reward is survivability. Or just spend a Second Wind, it's player choice (and not a terrible choice either) to trade that potential attack action for survivability, so it's the monster taking away player action with an attack without feeling like the player is not participating for a turn as it is his choice to recover instead of risking death to strike at the villain.
And in that case, if they Do die, it was player choice that did it.
You also have Party tension, the warrior is pressed into a bad situation, how can the other party members bail him out? The cleric most obviously heals. Perhaps the wizard would try to set up a barrier to halt the potentially fatal attack. The thief could have some kind of interrupting/distracting maneuver to avert the medusa's gaze, giving Fighter time to recover.
I thought of this with 4e as a basis in mind, hence the term Bloodied and all that.
The simplest way to stick it into 4e though would be, those effects that require a save to be failed (Sleep's slow->unconscious), if the target is bloodied then you skip right to the more severe condition.
With the Medusa, instead of slow->immobilized->petrify it'd be immobilized->Petrify
The other half of this is making the Bloodied condition mean more. Say... what if every time you strike a bloodied opponent, your weapon's critical hit effect automatically goes off (damage isn't maximized, but the extra die is rolled)?
This also helps to make 4e fights go by faster and with a greater sense of danger. Dragonborn and others who have bonuses tied to being bloodied probably need a boost to match this greater sense of danger though.
The 4e Beholder's death ray is an example of how something similar exists in 4e
9. Death Ray (necrotic): Ranged 10; +14 vs. Fortitude; 2d8 + 10 necrotic damage. If the target is bloodied before or after the attack, it is also dazed (save ends).
First Failed Saving Throw: The target is dazed and weakened (save ends both).
Second Failed Saving Throw: The target dies.