Nearly everytime I read a topic like this, my mind drifts over to MW2 and NetMech. A 400M splash radius as OP said is, quite frankly, absolutely ridiculous. That's way, way too large an area.
That said, I'm for ejection and self-destruction, but with reasonable restrictions. As another poster mentioned, self-destruction should result in a C-Bill cost and imo an additional penalty, like the forfeiture of one or a few components which have to be re-purchased and added at the player's discretion.
By this, suicide missions for crippled or defenseless 'mechs are a viable tactic as they were in NetMech, but aren't a free middle-finger to an opponent just because he or she outplayed you. There are benefits and drawbacks, and the penalty should be large enough that suiciding isn't an automatic last resort for anyone about to die.
The game mechanic should include a short 3-second delay between self-destruction and the explosion. Immediately after the key is pressed, the mech goes into a power-down state exactly as if you'd pressed P (default) while the power re-routes and overloads the reactor. 3 seconds later, kablaam, damaging other mechs within "melee" distance for the full amount of the explosion, and quickly tapering off within a 60m max radius.
Here's a visual on the distance. I can only assume that OP accidentally hit an extra 0 when he first typed "400m" as the blast distance.