You can name pets on RealmEye. But it makes more sense for them as they are permanent. The problem is it’s only RealmEye, and isn’t easily discoverable unless you browse that particular player’s RealmEye page.
They could add it to RealmEye in much the same way. Chars don’t last as long as pets so you’d have to decide what to do when a named one dies: re-use the name, retire it and choose another, or make the next one “Skull Smasher II” or similar.
But adding it to the game throws up all sorts of issues. Is it displayed only on e.g. mouseover like your guild? – if so why bother. If it’s displayed alongside your player name it’s clutter and potentially confusing.
It’s even worse if as you suggest the game can identify you only by this extra name, so you see e.g. o3 destroyer died to dark elf or similar. That means you don’t know who the player is. But the player name is how players are identified in game, and on here. If you want to react to their death, whether by consoling them directly or posting it here for LOLs, you need to know their name.
Personally I’d like them to add more info on death. Total fame e.g., especially for 8/8 deaths. Or have a way of interacting with graves, such as mousing over them, to see more details such as manner and time of death, gear, fame + fame bonuses. For all those times you wander across a 6/8 or better grave and wonder how it happened.