Many (not all) players see it as punitive.

Gear isn't the only thing that matters in CF, but it's important. Starting from scratch obligates you to spend some amount of time gathering basic stuff, with the end result being inferior to where you were at before the loot. When someone puts you in that situation without deriving any personal benefit from it, it often means they're doing it expressly to inconvenience you. That is, to be punitive.

People differ on what the "benefit threshold" is past which looting becomes punitive. What if I'm taking a piece of gear to give to a friend? Give to a fellow cabal member? Sell for gold? Give to Tahren? Etc.

Personally, I err on the side of not looting unless the person has something I'm planning to wear or that I know I can trade to someone else for something I want.

To some extent this is self-serving. For one, it makes people less likely to loot me when I die. But, also, it makes people more willing to fight me and more willing to not be ultra-conservative, because they know they won't lose all their gear if they miscalculate and die.