From the perspective of an investigative LEO, prison sentences are a joke. No one fears them unless they're caught on capital murder, and worse case scenario they can always PK out of the consequences.
Case in point, the most recent high-risk warrant executed on a certain someone, who was wanted for shooting at and killing a cop. He was able to avoid consequences by, ironically, shooting at more cops and PKing out of the warrant. I'm not trying to call anyone out in specific, and nothing they did he was against the rules - this isn't a witch hunt. It is, however, very indicative of the sort of things which makes the server so surreal.
Just the same, the consequences of losing a shootout and dying is that you lose a gun, and sometimes not even that - more often that not, a swarm of unarmed (M)s will descend upon the body of a fallen comrade and recreate a scene from Enemy at the Gates. If you win a shootout, even if grievously injured, all you have to do is AFK in a hospital for 5 minutes. Again, I'm not calling anyone out. None of this is against the rules. It's just how it is.
If you want to actually fix some of these issues, I have a couple opinions:
First, the penal code needs to be revamped. Discretion and fairness needs to be taken into account, as does realism. The current criminal points system is clunky at best. I've heard that something is already in the works, so maybe there's some improvement on the horizon.
Second, the injury script needs to be revamped. Injuries need to be treated in game, and /changechar shouldn't remove them. If there were real consequences for getting shot, maybe people would take shootouts more seriously. LEOs are just if not more guilty of doing this than anyone else. Doing this wouldn't only decrease the number of inconsequential shootings, but it would also provide a great deal of roleplay for factions like PHMC, and even for off-the-books clinics.
Third, CKs need to be handed out a bit more often. I said it. I've got no problem dying, I've got no problem holding the L, and I don't think most people have a problem with that either. CKs are important, because it's what allows for more fluidity within factions. It keeps things fresh, it lets people explore more concepts.
That's my take, at least.