Sometimes TPKs are no fun

  At Saturday night's Midlands 2e Sandbox game, I managed to TPK the party with a trio of ghouls. The party consisted of A 2nd level mage, a 2nd level fighter, a 1st level fighter, and a hatchling copper dragon(using modified Council of Wyrms rules to allow one of the players who on average loses 1 character every session to play the dragon from an egg the party found). With many players being new to gaming, or returning from decades long hiatus, I've been trying not to be too tough on them.
  Anyway, the game started well enough, picking up from the time before where the party was attempting to rescue the mage's henchman by fixing a problem they may have caused for the locals. They easily found the ghouls, but when they moved to attack, the dice did not favor them. The Ghouls managed to murder the party in less than 5 rounds. So, less than 1/2 an hour into the session, we had a TPK.
   The group created new characters and tried again . . . for another TPK. It's a darn good thing that character creation doesn't take too much time. It soon became apparent that the players were becoming frustrated and they didn't want to admit defeat to "three lowly ghouls".
   That's when I, as DM, decided to give the players a break. I don't like doing it, but trying to create new characters for a whole party mid-session is no fun at all. It's always half-assed, and the players don't have enough time to really think about or get into the idea of the character. When you combine that with the players' desire to get vengeance for characters they actually loved, then it starts being a slog for everyone.
  Instead of all this, I decided to let the players use the characters they had started the session with, letting them use what the plan they had not considered until it was too late. The session was effectively reset, and though the encounter was dangerous, the party prevailed. We called it a night after that, and I warned the group that this was a once a campaign event. Next time, the deaths would stand for keeps.
  I'll admit, as a DM who prefers to let the corpses fall where they may(I'm not a killer DM, but given the low level nature of the campaign at the moment, I'm sure a few people might beg to differ), giving the players a "do over" makes me feel more than a little dirty, but all in all, I feel I made a good call.