The other issue is that if it's known that the server may close people won't want to move to it in case it does - I for one wouldn't want to risk losing my character name (not that its likely) by moving to a server that may move and force me to chose yet another server a couple of months down the line.

Also although some people will chose to move to new servers I would imagine most people will just stick with the default migration server so moving means losing people on your friends list. Why would I chose to move to Ragnorok and lose my friends list if I'll end up on Balmung anyway in a couple of months but missing my friends list and risking having to change character name?

I think having region specific servers is binary, either you have dedicated regional servers or you don't; go the WoW route of servers restricted to a region or the XI route of everyone plays with everyone, let the community sort the rest out - did square make Belsaid the RP server? No, the community did, and I think the community is happy to manage regionalisation as well.