That's what IP logs and blacklists are for. Blacklists carry over despite name changes since it's blacklisting their account not their "name," so really, that has no bearing whatsoever. If you find someone a "horrible player" then chances are, you're going to blacklist them or stay away from them no matter how many times you encounter them, regardless of character accounts and whatnot.

Your second point? Inactive characters are erased eventually and the name becomes available again regardless. That has no bearing at all, nor has anything to do with the suggestion.