I feel your pain. For most of the last thirty years of game mastering, I've felt I've been too nice to the players, too kind, too wishy-washy. The threats I designed weren't deadly enough - I didn't push hard enough - I wasn't ruthless enough. Then there were the rare TPK's where I felt completely opposite.
I decided to become a bastard earlier this year. I told the guys that I had been playing 4e with up front - "I want to play old style D&D. I want to kill your characters. I want to kill them in a frikkin pit trap. But more importantly, I want you to be frosty enough to avoid that pit trap with your own wits - not at the roll of a die."
They were interested, but kind of freaked. "Can we have max hp at first level?" they asked. "Sure," I grumbled. "Can we use AD&D/AEC big style hit dice where the fighter would have a d10 instead of a d8?" "Sure," I sighed. "Death at -10?" "Okay." Their freak level reduced drastically and they started looking forward to the game.
In business lingo - they had 'buy-in.' They agreed to to support the 'gaming project.' Why? Well, they trust me enough to keep coming back for more. But more importantly - we bargained and made a deal. They had input. I wanted to kill them. They wanted more hit points. Did I want to give them more hit points? Nooooo. ONE HIT POINT IS ALL YOU GET, YOU SQUIRMY LITTLE MAGIC-USER! But it was important to them to have that buffer.
They really didn't take into consideration that if they were more powerful, I was just going to throw harder things at them. :) Live and learn.
We've made other deals and their characters have had an extra leg up once in a while - like for a period of time during low levels they were allowed to play two characters. That helped them feel a bit better. We are phasing that out now with attrition. I also instituted the Order of the d30, which allows them to use the d30 to replace any single 'in game' roll, which has been quite helpful to them. But each little concession or boost like that made me feel better about being the bastard - giving me license to throw the kitchen sink at them.
It's not like we have a TPK every week, but in around half a year we've had 4 deaths. The wonderful thing is that each one of those deaths has been perfectly guilt free on my part. And almost all those deaths have been when I turned up the heat and something went wrong in their planning. Like jumping on a frikkin airborne dragon. You know, that kind of wrong. :)
A lot of players these days have a sense of entitlement. They feel their character shouldn't die. They feel that their stuff should never be destroyed or stolen. They want to be immortal gods at first level. Part of that is because there are more players that GMs, so the gaming companies design games to appeal to where their cash is coming from. The other part is because GMs let them - to be nice or liked or that's how the damn book told us how to do it.
While playing pumped up glowing-haired wuxia death ninjas out of the gate can be a valid and enjoyable form of role playing - it's not the only one, and it's certainly not the way we started back when we were riding dinosaurs to school. Forcing the players into an LBB/OD&D style campaign would have been a disaster. Their expectations were no where near such a thing. Sitting down and being honest about the type of game we wanted to play has paved the way for a really completely awesome gaming experience that's going on now in our Labyrinth Lord game. I enjoy REALLY trying to kill them, and they enjoy outsmarting me. And when someone does eat dirt, we laugh and laugh and laugh - wait for the guy to roll up his next character - and keep on trucking.
I hope that you can get the type of edge in your game you are looking for. I don't know if what I just wrote will help you achieve that in any way, but I'm crossing my fingers and am thinking happy little tree thoughts for you and your players. :)