I don't really have a preference, provided the games are balanced around the method they choose; both have merits, both have disadvantages.
I wrote a piece about something a bit similar when I was talking about a difference in design between the Wizardry games and Might and Magic:
I recall reading an interesting observation about the differences between the early Wizardry titles and the early Might & Magic titles along these lines which I think reflects a difference in philosophy which ties in to the central theme of this thread. Both games are old enough that save-anywhere really wasn't an option, but - along a similar theme - there were notable differences in how the two games approached regenerating resources (HP, SP) combined with the nature of combat.
Might and Magic, each individual fight is potentially dangerous unless you're reasonably overlevelled; there's usually going to be mechanics that can wipe out your characters if you're not suitably careful to plan around them. You can expect to use up significant amounts of resources in any given fight. However, you can rest in most places in the environment, and doing so removes most status ailments and fully recharges health and mana; each fight will generally be approached with a full set of resources.
In Wizardry, however, the individual fights aren't really all that unpleasant. A nasty status element here, an occasional big hit there, but in general a fully-powered team will have little difficulty with a fight. However, you can't regenerate resources - in general - unless you're in a town. In other words, Wizardry is balanced around the accumulation of fights.
I don't think there's anything inherently wrong with either approach, fundamentally. Both require different skills, both are valid approaches to game design - and ultimately, both have benefits and pitfalls.
More importantly - and I need to highlight this - there's nothing inherently more noble about beating a game designed around conquering the accumulation of challenge and managing resources than there is about beating a game designed around conquering individual tailored challenges. Or indeed vice-versa!
I think there's a similar issue with health packs and regenerating health; Regenerating Health is similar to the Might and Magic approach, where an individual encounter should have the potential to kill you, but you'll generally come into them at full strength; health packs are effectively the Wizardry approach, where the individual encounters can be quite simple in general, but the dangers stem from the accumulation of attrition through many encounters until the next pickup comes into view.
Health packs encourage you to be careful with conserving health, good
Health packs getting me into a situation where the
right tactic was to take a four-minute roundtrip through cleared area to collect a health pack I didn't need at the time, bad.
Regenerating health ensuring that a fight can always be balanced around the assumption you're on full health, good.
Regenerating health making running and hiding from threats an easy way to trivialise many fights because the AI can't adapt to it, bad.
Advantages and disadvantages. I think I would say that given the choice, I'd go for regenerating health, just because I tend to resent situations where the smartest tactic is tedious; at least with running and hiding, there's the stress of whether you're discovered!
On a more general note, I think regenerating health is
easier to balance well. That doesn't necessarily make it better, as such, but it means I can go into such a game with a little more confidence.
