Beta/EA is one thing, but an error like 1017 would be unacceptable post-launch. At that point I will be paying for access to the characters I have created; not letting me in is a denial of service.
Besides, if I was allowed to create that character, clearly the world was not full yet. So don't tell me it's full when logging in. It's not like it's hard for S/E to see the # of unique service accounts that have characters on any given world.