So I'm being told by Square that creating a character under a rival nation and dying repeatedly can ruin the central feature of the game and that a fucking dollar is going to be a barrier between good play and breaking the game?
They probably (no duh) expect a pretty large user base. If they let you have 3 free characters, and the rest were $1/month, pretty much everyone would have 3, so their database size would triple. I highly doubt 1 player = 1 row in a SQL database. 1 player consistutes a large amount of data for any RPG, MMO or not. By charging a nominal fee they're keeping their costs lower, and increasing revenue. I say "nominal" because, for the people who actually play with multiple characters, $1 is nothing. That's $12 a year. I spend $12 on lunch.
Now, for a company just starting out with their first MMO game, you're going to want to do everything you can to get people to play your game. That probably includes not charging your players extra for *anything*. Square, on the other hand, knows that millions of people out there love Square and Final Fantasy games, and they'll handily pay anything just to get their hands on it.
It's called business. This is also called the "business high-road post" in your sadly typical "why all game companies are out to ream their customers" thread. --yrns