For the sake of names, this generally isn't a normal practice. It comes with a number of problems that are on the user level, that's why. The most important one of those being that there is a potential for lasting impressions pertaining to that character name on the given server. This could be on the end of someone pretending to be this person before (very far fetched) or that someone take the name of an individual who had a bad rep. You generally don't want to start on a server that had someone with that exact name renowned as a d-bag, ninja looter, or just an overall bad player. Then there's always the obvious one that said player may join up again some day.

In most cases, this might only occur if servers cannot handle new character creations anymore, so they have to purge character data entirely. FFXI had a period of time that this was a thing, though it was extremely rare for it to even happen despite that. Given that our character names are based on first and last, the potential for it to be a problem is ridiculously small compared to games involving just one name. You can always alter a name that is already taken. Just remember that generally, names you don't come up with yourself (stuff from movies, books, anime, etc) are always going to be a high risk for being unavailable. For that (good) reason alone, devs won't see it as a problem, and instead look at it as more of an inconvenience to the games players.