I also think it's very easy to get around the flaws in the game if you possess any critical thinking skills at all. I knew about the micro-transactions going in, and my mindset was to basically pretend that they don't exist.
1. Yes, if your character dies, you lose what you were carrying. Honestly, many games could (and do) replicate this kind of system, depending on how forgiving a save system they have.
2. Yes, when you die, you have to wait an hour to respawn with that character unless you choose to pay. You can, however, create another character with no limitations. I'm pretty sure you have 5 slots for characters. I've only used 3 slots and have never had a need for more than that. If you can't keep 3 characters alive over the span of an hour, you're doing something wrong. This isn't an FPS. Stop playing it like one.
3. Yes, you can choose to pay for weapons, ammo, armor, etc. You can also find it at numerous places around the map that are uninhabited by zombies and are generally safe to explore. If you're smart, you'll play on a server that isn't very full, thus decreasing your odds of running into players looking for trouble. As soon as you join a server, press the TAB key, and look at the list of people in the server. If it's filled with "thugs", it would probably be a good idea to disconnect and find another server.
4. It's also much smarter to play during daylight (for obvious reasons). All servers are on a consistent clock which you can easily keep track of here:
http://warzti.me/. I've also read that there are iOS and Android apps for this purpose as well.
5. Your loot can be stored (for free) in a vault at any of the settlements, and used across all your characters. If you've got a full backpack, it might be wise to head back to a settlement and store some stuff. If you're wandering around fully loaded all the time, don't be shocked if you die and lose everything.
It's really not that hard to have success in this game. You can question the ethics of the developer if you want, but like I said, I've seen EA Sports do the same thing. But the game definitely isn't broken. It just takes a little bit of thought and strategy.