If you look at it from the perspective of making the combat as 'realistic' as possible, then injury has to be meaningful. Being able to get back to fighting effectiveness too quickly would lessen the impact of injury, and probably result in people taking more risks.
Although having to bandage various parts of the body is a little abstract, at least it gives you something to do, whilst vital time is ticking by. It makes being hit, inconvenient at best.
I agree with Evrik, the server has been much more stable without Xmed
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