I would imagine that our current characters would transfer over when 2.0 is finally released. I couldn't imagine SE forcing players to start over from scratch. So how is SE going to handle an entire player base who is essentially maxed out in levels?

The current players are going to be able to skip past most of the beginning content of 2.0 and focus on end-game almost immediately. They could raise the level cap significantly, however that would put new players at a great disadvantage as they probably would never be able to catch up.