Deleting characters is never a good thing, my buddy came back to the game after a year break.. under your rules he would have to start over.
Even if it's an alt I don't agree, I can never get behind deleting characters for any reason. The only exception would be gil sellers.
Now, if we are worried about names being taken, you could have a system that releases a name after x period of time of no play or something of that sort... I don't particularly like that either, but it sounds a hell of a lot better than deleting characters.