The character creation restriction is bad, bad, bad.

[Alahra]

This worked in FFXI due to the lack of social media. Nowadays, such a system would accomplish nothing. Between twitch streamers, forums, reddit and twitter, the password would be passed around so much, everyone would know it.

It was a one time code, so passing it around would have no real benefit. The code itself cost gil, as well, so you couldn't get an infinite number of them. It wasn't a huge sum, but especially early on in the game's life, it was significant. And if gil wouldn't work, some sort of limitation based on time (like one code per day or one per week, or whatever) would work, too.