Actually, that's debatable. Some people think that he did indeed die and that Link's wish when he touched the Triforce was to bring him back. Other people theorize that his wish was to return everything to normal, but there's no proof of that happened, since the Dark World would probably have...
Shadsie's post raised some interesting points. Taking it seriously and from a storyteller's perspective, she's probably on to something.
Another side of it though is the fact that at least in the beginning, Link wasn't intended to be a character. He was a "vessel" of sorts for the player. He...