Elf drops load of mithril by drow about to do a get all. Drow gets all and kills himself. Not even in pk range necessarily.

I have already seen several characters throwing down iron weapons of the type a raiding elf uses just to make him pick up the wrong one when he is disarmed.

Likewise drow can use iron to kill an elf.

Seems the damage is fine to me since you drop the thing anyway. It isn't like you can ever benefit from picking the thing up.