If we pick an appropriate value for the "not alive anymore" penalty, then it won't be so large as to outweigh all other considerations, but enough that situations with unnecessary death will be evaluated as clearly worse than ones where that death could have been prevented.

Under your solution, every life created implies infinite negative utility. Due to thermodynamics or whatever (big rip? other cosmological disaster that happens before heat death?) we can't keep anyone alive forever. No matter how slow the rate of disutility accumulation, the infinite time after the end of all sentience makes it dominate everything else.

If I understand you correctly, then your solution is that the utility function actually changes every time someone is created, so before that person is created, you don't care about their death. One weird result of this is that if there will soon be a factory that rapidly creates and then painlessly destroys people, we don't object (And while the factory is running, we are feeling terrible about everything that has happened in it so far, but we still don't care to stop it). Or to put it in less weird terms, we won't object to spreading some kind of poison which affects newly developing zygotes, reducing their future lifespan painlessly.

There's also the incentive for an agent with this system to self-modify to stop changing their utility function over time.