That would make sense, but that's not what the character said.
If it just kept you alive but inactive, in limbo or something, that would have been fine.
But the very designer of the game said that the brain is fried at the moment of death. So 1-up are impossible unless they also have resurrection technology, which would invalidate the whole problem of dead players.
This is a major plot hole and that's what we're complaining about.
Yeah, you have a point there, that wasn't really thought out for such a major part of the story, being one character sacrificing herself bit by bit for her love one.
Game death should put person into comatose state not "brain fry", crude machine just shouldn't able to "process concept of death" and revival being "loading a save point" for a price of actually toasting the device because "once the game starts, it never ends until plugged out" reason why it's so rare in game.
But hey, it's just a lesbian and an oblivious trans woman bisexual romance story, let's not bother with details