Should SE delete characters that were never used? No, unless they're bots (which there are many and untouched). Someone might return and give it a try again, only to find out that their character is long gone. Maybe under a certain level, but why that when I can still log into my old mmorpgs like Rift and Aion and still play my old character there? And no they're not capped, they're fairly low level and they're still there, waiting for me when I want to give it a try again. Infact I still have my cleric from when Aion became f2p!
But name deletion would be ok or else it'll end up like WoW where almost any name is taken, even the most weird ones.