In my case, I'd probably rp trying to avoid the sickness for a while, and then catch it at some later date further on, both so that catching it felt more natural, and so that I could experience both sides of the rp.
While I almost certainly wouldn't mind it having crippling effects while active, nor would I mind it leaving effects even after, with most of my characters I'd probably prefer not to have character death, mostly because it is, in general, a fairly anticlimactic end. Not to say it always is, but I'd expect it to be an exception rather than the rule if it were. That said, I wouldn't mind having one of my less played or shelved characters die in such a way.
As for the rp setting it would create, I think it would be quite interesting. As it got worse, there would be more and more desperation within the city, probably leading to paranoia, increased crime and even looting, more powerful gangs, possibly even cults, among other things. I image from an ooc perspective there would be the issue of most people opting not to catch the disease though, reducing how much it actually effected role play. In addition, if it was forced under certain circumstances, I'd expect there would be a lot of salt being thrown around. That is, if the enforced rule was followed at all, which I image would be difficult to properly enforce at all. Certainly there were many people who landed in the sewer water enough to catch sewer maggots without doing so before. Not to necessarily say that's bad. If anyone doesn't want to do a certain type of rp, then it's not really my place to push it on them, but from a server-wide perspective in the case of a epidemic, I can see ooc desire to avoid disease and harm to characters potentially being a substantial issue to the overall efficacy of the setting.