I was thinking, and the agreement and disagreement of (un)limited torches has been a heavy topic. A very possible and plausible solution to this is to add another difficulty mode. The Hardcore game mode should utilize all of the realistic elements of this game to their full extent. This could mean more fall damage for your player (possibly even monsters as well), monsters are faster/do more damage, arrows have a chance to break, and most importantly of all limited torches. This means that not only are, like the mode states, hardcore gamers satisfied, but gamers who enjoy a more leisurely and peaceful approach to the game can also be happy. If you have your own solution or want to improve this one please leave your thoughts and ideas below.
I agree with Jor_727 completely. This would solve the issue. Peaceful does not cause torches to go out, anything harder does. This, in my humble opinion, is one of the best solutions I have heard so far.