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There should be a RMAH for Hardcore as well. But if you die in Hardcore your character will be automatically placed in the Softcore league. This would be a better way to utilize the RMAH in both the leagues as opposed to only being in the Softcore. Also all the items you purchased on your character that just died will still be playable but in Softcore league, this makes more sense rather than just having a gold AH for Hardcore since this will provoke third parties to sell items in this league.
It wont work; you are in a roundabout way paying real money for the ability to not lose a charcter in hardcore. While as it stands now, RMAH does not guarantee the ability to one-up another player. By doing this, you will be implementing a means of One-Upping someone through the use of real money.
So no, this will not work and stands almost no chance of being implemented. This is how its going to work, these are the choices in fairness for Blizzard.
1) Allow for all hardcore chars when die to become softcore
2) Not allow hardcore chars to become softcore when they die (assuming they used RMAH)
3) Keep RMAh items when die even in Harcore
4) Lose all items (including RMAH items) when you die in hardcore.
5) Disable RMAh in its entire from hardcore.
6) Leave things as they are now...
So yeah, those are the choices.
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