I do not disagree with you. Again, this is something a GM would be able to answer.
This sounds right.
I want to say that I recall this discussion coming up when the game was live and the answer was something to the effect of with the amount of work required, it would be easier to create a whole new engine. This is what Cryptic did, hence what exists in CO, STO, NW and so on.
No doubt, however I personally think this is the minority of cases. Most names would get released by freeing up those on accounts not logged in in over a year.