So this is the first Fire Emblem I've ever played, I'm 9 hrs and 30 minutes in, chp 11 (playing on hard/classic), and unless there is a significant spike in difficulty later on, permadeath has basically become nothing.
Nobody is dying at all any more. The relationship system, as much as I love it, kind of makes the game easy once you get a few characters to S rank. Almost every enemy has less than 50% chance to hit any of my characters, my characters can hit them twice (or even 4 times if their partner hits them as well), and their critical hit percentage is almost always above 30%. So, I've only had to restart for the first few chapters.
However, this is only because I did restart any time I lost someone. So while I don't agree that permadeath is pointless all around like some people here, I will say that, unless you have the will to continue after someone dies, it will become pointless very quickly. If you are willing to just let your characters die and move on (which I'm going to do next playthroug), it will most likely be a more meaningful experience emotionally. But by keeping all your characters around and getting them to S rank, they become all but completely broken and overpowered, making the game easy anyway. I'm still loving it, though. The relationship system is so much fun to mess around with. And leveling and changing classes and the sheer amount of characters with real personality. It's great all around. And with so many options that I won't even see on one playthrough, who knows how long this game will keep me entertained.
But my advice is, to anyone who hasn't played the game and thinks they might want to try it with permadeath on. If you have the guts to just let characters die and move on, do it. It does have a chance of being emotionally engaging. But if you have to keep everyone alive, don't bother. Unless you're playing on insane difficulty, playing on classic won't affect the difficulty after chp 5 or 6 (around there).