*Rewards are not guaranteed to actually reward, and may in fact turn you into a zombie, destroy your prize heirlooms, eat your soul, or otherwise act as the opposite of a reward.
When a player accomplishes something, whether it be a quest, a level, or a tricky puzzle it is natural to reward their success with a prize or acknowledgment of some sort. This isn't always necessary, but often adds to the experience.
No one would argue that one should penalize a player for succeeding.
Despite this, I recently encountered a game which did exactly that. Upon reaching level 8 in Runes of Magic I was awarded an item which would upgrade my weapon. In fact, I was lovingly gifted an entire stack of this item, promising the potential for a sizable increase in my character's potential. The fine print did note that "there is a chance of failure which may downgrade the weapon", but any reasonable person would understand based on such wording that the chance of failure was small, and the chance of a downgrade even smaller.
The stack, ten in all, resulted in one upgrade and nine failures. The very first failure removed all the good the upgrade had done, and the second removed the intrinsic good my weapon already had. If you're trying to encourage people to explore and enjoy new and interesting game features, such a mechanic is a dismal failure.
If I wanted to take one step forwards and two steps backward, I'd go play Ninja Gaiden on Master Ninja mode and stab myself after each death.