I think quests are fun. Quest that you can fail and lose your chance aren't.
I once did the undead Quest for a Cleric. I managed to the quest with the aid of the old code, but there were some questions.
OOC questions about the expected "behavior" of the said Qrace.
I answered those to the best of my abilities of what I though the creator wished me to answer.
There never was any feedback if the answers were correct. At the end, I failed, because I answered something wrong.
I immediately stooped playing the character. I knew if I played more I would eventually get another chance.
So what happened? What happened was that I found the quest to be incredibly hard without enough hints. If I hadn't dug the old code for some stuff, I would never had finished it. I had no idea what I should answer to the question. Even the help files weren't helpful.
I was extremely angry that it didn't even tough me what was the expected behavior after I failed. So I decided that it was a complete waste of my time, and that the quest looked a lot like a gate to block the passed of the uninitiated, like doormen at a nightclub.
I also did the PSI quest. Totally different. It was extremely well tough out and completely fit the RP of PSI's.
I managed to pass and fail the first time, so I did it a second time and got a pass. But it bugged, and I had to try to do it 4-5 more time while I was already a PSI. Let's say I lost a CON point. I was having a complete blast even with all the unneeded dieing.
I did an Avatar once. There was no quest. One day I woke up and I was an Avatar. I didn't mind, and in fact prefer it over having to do live RP with an immortal, as I always feel inadequate in those moments. But if I could chose, I would prefer to do an Quest.
I applied for an Demon once with a DK. Some monk decided to apply at the same time. The demon god at the time told us that we were both applying and asked us to do something to impress him. I bountied the monk, PKed him and brought him his head.
I though it was so cool, the Demon gold appeared and tried to RP with me entering some sort of portal. I acted like an headless chicken because there was no portal object. He grabbed me and rammed me inside a portal with an emote.
Then when I gave him the head, he told me that wasn't what he had in mind, and that I was a good PKer and the monk wasn't such a good PKer but was a very good RPer. And then stuff happened and I could play more for a time.
I was a bit more explicit on the undead quest, because it has been changed.
Where am I taking this rant?
Well, everyone loves a good quest. People don't mind dieing in a quest. What we do mind is losing our chance to get the quest thing.
We don't even mind failing the quest, and losing our life, IF we can do it again and again till we figure it out.
People may get mad at being PKed, but losing during solo play is different psychologically.
If we are asked questions about what is expected of us, at least provide during the quest the answers to those quests.
What we mind is losing all the hard work, because we failed it.
It's easy, make the penalty for failure, death, not failure.
Our god can reincarnate us again to try it again until we please him.
Quest should be a fun part of the Qthing experience, not a judgement time. That is what the application period is for.