So. Them refunds.
Basically, the original intent of a refund as created by Aldric on EU_A back nearly a year and a half ago was, quite literally, to shut the "victim" up. Over time, as the "victims" became more numerous and came to the realization that they could make money by capitalizing on administrator laziness, incompetence, or corruptness. So, over more time, the high admins of the EU_A server and NAPW servers created this idea that the player is entitled to a refund in almost any situation in which they were slightly wronged. At first it wasn't too bad, a little bit of extra money didn't hurt too many people. However, over time, due to a growing reliance on this refund money, players simply stopped making stuff. It's why there are no horses. People don't make armour or weapons very often, either. Without a doubt, there is more money spawned into the game by admins than has been collected by players at any point in time.
Taking away administrator refunds entirely removes the incentive to whine to admins for money. The only benefit a player can get is removing a rulebreaker, which benefits everyone. If their case is not worthy of removing a rule breaker, they do not deserve to be refunded for a slight inconvenience.
On that note, if administators do not spawn refunds even for those victims of verified rule breakers, it will create a deeper reliance on other players to either fund them, protect them, or craft new things for them. The more negatives there are to being killed, the more likely a player is going to desperately avoid death. Avoiding death through in-character methods is pretty much the basis of all spontaneous roleplay. Players who legitimately fear death are considerably less likely to perform suicide charges from the spawn to an enemy castle, or wildly attacking a much larger group of guards for a miner in the off chance they win the battle and take the loot.
Basically, the idea behind removal of refunds is to give players an incentive to live by creating larger, more lasting negatives to dying (be it by rule breaking or not).