I believe that banishment would be a far superior fate when compared to death. With banishment, one would never see one's friends, relatives, or other loved ones ever again, in addition to the obvious consequence of having to start all over again financially (buying a new house, getting a new job, etc.). This would be terrible for most people, although there are undoubtedly a few who would in fact prefer this "punishment" over their current situation.
Death has no real advantages over banishment, as death includes nearly every consequence associated with banishment. Dead people have absolutely no contact with those who are alive, contrary to the superstitious opinion that a surprising number of people possess. And although the concept of an afterlife is widely accepted, there is no way to conclusively prove its existence, or, assuming an afterlife does exist, to determine what sort of experience said afterlife would be.
With banishment one is given an opportunity to "start over", an opportunity to make new friends and meet new people. This would actually have a positive aspect to it, as mistakes that were made in the previous situation would most likely not be repeated. Corpses do not enjoy these benefits.
However, although the choice may seem obvious, there are people for which death may be the better alternative. Persons who are particularly emotional or sentimental would have a very difficult time, as would those who are very "attached" or emotionally dependent upon certain others in their life. And obviously, some who are in love become so emotionally invested in their significant other that banishment, to them, would be worse than death. In other words, those who would let their emotions get the best of them would have an extremely difficult time with banishment. But those who are not very...