COH did have a crazy high retention rate, but that was also partly due to the fact that it was tough getting in new players prior to F2P. Still, there just weren't at lot of games at that time that had such a reputation for socialization and expression. The F2P details were shared at the first and last Player Summit ("Pummit"), which was the lower budget successor to HeroCon.
Yeah, that was the main driver for the Incarnate system. There was a segment of the playerbase that wanted more power, but we weren't going to increase the level cap, so it was an indirect way to do that.