One of the things that we talked about in the podcast (I've you haven't heard it yet, go to it!) was that Adventures in Oz: Fantasy Roleplaying Beyond the Yellow Brick Road has a No Death Rule and a No Fireball Rule.
When I was designing AiO, one of my big questions was how to resolve the inconsistencies of the Oz stories. In The Wonderful Wizard of Oz, the Tin Woodman winds up doing a lot of killing with his ax. The Road to Oz mentions a suicide. Later stories, however take a decidedly different turn, declaring death impossible.
But without death, there tends to be little risk in combat. One thing that particularly irritated me about Faery's Tale was that losing a fight meant that your character had to sit out for a scene. Probably a stern consequence for the young children that the game was designed for, but feels a little too milquetoast to be effective for grownups.
Ultimately, I decided that the worst thing next to death was living with your defeat. Opponents may take advantage of your reduced Wits score to use an Impress maneuver and force a concession. Or, as I mentioned on the podcast, beating someone down to 0 Wits could mean that they collapse into a bawling heap that you then have to deal with.
Now imagine that you've just had an epic battle with a dragon and you have emerged victorious. Instead of a dead body and a hoard of gold, the party now faces the dragon crying prehistoric crocodile tears and sobbing about how none of the other dragons will take him seriously now. Consequences? Yes. Death? No. Adventure possibility? Totally!
The Deadly Weapon trait and the Deadly Strike maneuver it allows is another opportunity for adventure. Although they have Deadly in their names, they are very much not lethal, but it does serve to convey their impact. When the Tin Woodman swings his ax, it's best to watch out. Seeking out replacement limbs from a craftsman of some sort or maybe a secret sorcerer is bound to be an interesting adventure. And the limbs that you wind up with can be fun, too. I seem to recall an Oz character from the Ruth Plumly Thompson era with a "game leg", an artificial leg that housed a number of games within it.
The lack of direct combat magic (fireballs, lightning spells and other fun zappy stuff) came about for two reasons. First of all, it never happened in the stories. In fact, I think the only time magic was used in a conflict was when Dorothy used the Magic Belt on Ugu the Shoemaker. The other reason is that the combat system didn't really have room to shoehorn it in.