timeadept said:
A developer knows how much health a player has when he is going into any given fight, and so it's easier to design a fight with the health factor taken out of the equation.
This. The best parts of Halo (where the regenerating health made sense, and also the first mainstream example of the mechanic I can think of) and its sequels made use of the fact that every single battle could be a set-piece. No longer did you have to have crappy rooms that posed no real threat, or have to ease off on your nice, big battle because you were unsure how many health packs your hero was carrying.
When the developers make good use of their health system, each and every battle can be hair-raising, oh-my-god-I'm-going-to-die, manic fun. This often requires the difficulty to be on a higher setting than "Normal", but Halo was always designed for "Heroic" (the difficulty description states this). I can remember hundreds of tense gunfights listening to that "bipbipbipbipbipbip" of the shield warning system, followed by the welcome, loving, charitable "dooooOOOOO" of the shield regen. It characterised Halo for me. I felt like the a Spartan, moving tactically, attacking at the right moments and hitting cover as appropraite. It made those "Rambo" moments where you just had to run out and kill every last *cough* in the room exciting to get through because you didn't have a large pool of health, you had a small pool that forgave minor hits. Standing amongst your fallen foes, breathing a sigh of relief, listening to the "bipbipbipbipbipbip" that said "You know, that was close". It was exactly what a shooter encounter should be like.
I had problems with Half-Life in that I would often find if I was at full health/suit, I was unstoppable. Eventually I would be whittled down by stray shots and this piddly room with nothing interesting in a long corridor of nothing interesting would take half a dozen tries because I only have 20 health. That's not fun, that's frustration.
For a better implementation than Half-Life, see Max Payne - it's "Health by station", but the stations carry an amount of health relative to your performance: Doing well? There's only one pack of pills here, doing badly? There's a whole bag-full to perk you up. The net effect is to keep the player at an "average" health that the developers can exploit for exciting set-piece battles.
All of this said, the worst implementation is Fire Warrior - dull corridor crawling with regenerating health is missing the point of regenerating health completely.
Tl;dr - regenerating health is not a bad mechanic, because it allows developer freedom - they can choose to make great battles with that, or dull work-a-day rooms of mooks. That's their call to make a dull game, and our call to pull them up on it.