I think the entire game is balanced around the mechanic of "Prolonging Death". There's no way to cheat your way out of death by undoing damage already taken (unless the game gives you a health orb, but that's no guarantee), but there's plenty of ways to stretch out the distance between HP 1> and HP = 0.
You have DEF potions, Talents, Protect, Cards, Pets and Equipment to reduce damage taken.
You have Equipment, Cards and Pets to raise Max HP.
You have shields to block incoming damage altogether.
You have skills to help manuver out of taking damage (Piercing Dash, Dodging Strike).
In multiplayer you have the ability to ressurect your buddies, if you can find a window to.
You even have ways to distract enemies from hitting you. (Frosty Friend)
Worst case scenario, you have grinding and level-ups to increase your stats.
And most importantly, you have a ton of ways to make enemy HP = 0 before yours does. Even if you do die, you just get right back in there knowing new ways to avoid damage.
The only way healing could ever possibly be balanced in SoG is if Energy weren't infinite. Secret of Mana limited your MP and limited the number of MP replenishing items you could carry, but it also balanced it's boss battles under the assumption that you had ways to heal. So they took longer, hit harder and felt more tedious if you did die in the end. Same with Link to the Past and most other RPGs.
In SoG we get shorter and more skill-based boss battles in exchange for not having to worry about HP micromanagement. Memorizing boss patterns and dodging attacks seems so much more satisfying than guzzling a dozen potions or circle-strafing until you can cast Cure while wailing on them, at least to me.
Now that you point it out it makes sense, SoG is more of s kill based game where you have to learn how to prolong your death for as long as possible. I've clocked several more hours in the game and I will admit, having to learn the attack patterns and optimizing skills, gear, and strategy to overcome the game is better when you know that every mistake, too slow reation, or getting out maneuvered is going to cost you a little more than a few quick heal spams to fix.
And yea the penalty for death is this game is really just a bit of frustration until you learn how to "make enemy HP = 0 before yours does."