I think it is still fun. Just a different kind of fun. It shifts to a taktical game with lots of interesting strategic discussions instead of an exploration game.
Well, of course it depends on the type of game and context, it just sounds a bit like an uninteresting tool, to just have a just invincible NPCs. I think special weaknesses make every NPC more interesting. Give the NPC a weakness (eg. Superman hs cryptonite or Lord Voldemord has Horcruxes).
Easy. Bitcoin.