There are 2 ways to ensure that monsters stop being scary.
1) Kill them routinely. I'm not sure I have to expand on that, because it was pointed out before. Silent Hill spoiler here:
2) Get killed by them over and over and over again. First time it's scary, second time it's much less scary, after nth time it's just frustrating. Plus, by dying in the game, you are reminded that it's only a game after all and it's a deal breaker for immersion.
So, I believe the second point is where developers coming from in regards to monsters despawning. But I can totally understand how people can see it as way for developers to say: "lol you suck at it, let's make it easier for you, so you won't get frustrated and stop playing" and get offended.
Another way to approach this problem is "permadeath" or "hardcore" mode when if you die, you lose all of your progress, but that doesn't really work in this type of games.