I think one of the most beautiful things about the way this game is balanced is that it's possible, even somewhat common, for the team with higher level characters to loose the game. I'm a bit of a rusher myself, and I find that I die first in probably 25% of the games I play. But honestly, who cares? Oh darn, I've got to wait like 25 seconds and spend 250 for a teleport scroll to get back to the front line. Big whoop. The maps aren't big enough to complain about having to walk "all the way over there" like some games. And seriously, if you die on level two or three, the bonus for the other team isn't that large, especially on maps with more than a few gold mines. Being five levels behind everyone else doesn't make you worthless, it simply means you can't tank other demigods. oh darn, you have to play intelligently for a few minutes to bring your level up a bit.
On the subject of waisting time, this isn't civilization. these games take all of a half hour to an hour, maybe more on a large map on conquest or with two very even teams.
I understand if you're playing Civ 4, where games tend to take 10+ hours to play on a normal map, or even 40+ on a huge map with 10+ players, and you are down to three cities clustered together on hills each with level 23 mechanized infantry lead by a general and you have no allies, yeah. surrender, quit whatever. You're screwed, but you COULD wasit an hour or two of the other players time as they have build up a hugely massive force to whittle down your units and finally take them all in one turn. But don't. It's not fun.
I also understand if you're playing starcraft, and both players have just hit the top of the tech tree, but your defences have just been overrun. Yeah, you could sit around and wait until those guardians mop up the last of your scv's and supply depots. heck you could even stop a zergling rush by lifting off your barrax and forcing them to build a hydra layer and run some ranged units over there to kill it slowly. But you shouldnt, because you can't win.
This game, however, has tug-of-war style gameplay. it doesn't matter how close to the line you are, you can still use the allied chat and organize a takeback, and drag the other team facedown in the mud going "what the heck just happened?!" as you all spawn and smack the crud out of the attackers (who may happen to be sitting on your health regen crystal... fail), and suddenly control the map by the time they get respawned and organized again. Falling behind sucks. So you loose your defensive towers. Big whoop. Most games seem to have very few players willing to put any money in the defense upgrades (except the first regen), and rightfully so, as the towers are pretty much just there to stop some rushes and give quick players a line to fall back to early on when nobody has health regen items. I played a conquest game yesterday where I blitzed their defences after loosing most of mine (with judicious use of health potions, i will admit), and stole their reinforcement flags. they were like "what?! our citadel is under attack?! omg go back and defend!!!!" at which point my allies pushed the line back through the map, and we came through for the win. Yes, I died a lot. Yes, I ended up with the lowest level character and less favor points than anyone else on my team. But we won, and being a team player made that round hecka fun and quite exciting.
But I digress. This game is not DotA! It's MUCH easier to come back from a near loss to wipe them out in Demigod. So, don't quit because you think you've lost. You haven't lost unless your citadel is at like 2000 health and everyone is dead. At which point, you may as well just wait all of a second and a half as they finish it off. And ESPECIALLY don't quit just because you died a few times.
And yes, a penalty for quitting would be cool. Or you could set up the character stats to record the win/loss whether you quit or not. I played another game that did that... I don't remember what. But in any case, if you are in the game for long enough to get killed, the loss should be recorded on your stats if you quit. "But what if I have an IRL emergency and have to quit?!" Well life happens. Sucks to be you. That happens to everyone now and then, and so the stats would balance out. So your wife gets home and has a fit that you haven't done all the stuff you promised her you'd do while she was out. Oh darn, that's one loss on your record of like 500+ games. It doesn't make that much difference unless you're start scumming (an old roguelike term for starting new games over and over until you get the perfect start so that you can get maximum points instead of just playing through the good and bad like was intended).