To be honest, I'm not sure new players would really benefit much from this.

It's not just a space constraint after all, it's also a time constraint. Why would you farm up the mats for something that sells less in the first place if you can get something that sells for more? That's just less money per time. So why would low level gear supply increase? Only way I can see is if crafters get low level mats delivered for free or the prices for higher level stuff goes down enough to make farming the mats more profitable.

But you realize how much they would have to drop, right? A fresh lvl 50 will have 500-700k tops, if he didn't buy anything and cut corners. Even going to the vendor for gear hurts a little and those items still are three times cheaper than on the MB unless they come en masse via quests or random drops, in which case they are usually sold by people who just want to get rid of the excess stuff for "any" price.

So, no, I don't think limited retainers hurt newbies in any way. Even if people had unlimited space to sell and time to farm, people would rather go for the most profitable items if they sell to make a profit. And those simply aren't items that cater to people with very limited budgets.