I've thought about this concept for awhile as a thought experiment. I think there's also the "other side of the bet" that's interesting too. For instance, as a protection mechanism. If you're confident that you can protect yourself from an ever increasing death bet, you can take the other side and bring down the incentive for an assassination. Part of the "insurance" cost for hiring body guards too, because you have to keep them in check as well and not make it worth turning on you.

However, where I think this breaks down is how naive and irrational markets can be when "retail" enters the picture. You really wouldn't want a GME situation to happen to someone's life. Mobs are incredibly stupid and just want chaos and death.