I think that the justification given by WordPress about permanently removing deleted URL's from the domain space of WordPress is at best flimsy and at worst nonsensical.
What if this was paralleled in the real world? Imagine if someone lived in a house then it was pulled down for some reason and when someone else wanted to build there he would be stopped by a law that said "No! When someone pulls down a house in this address then no one is allowed to build anything here for all eternity!" Or what if we applied this to a flat rental scenario? "If the current resident terminates his residency here then this flat must remain empty for all eternity!"
I am sure that a great number of people are very frustrated when they discover that their favourite url name cannot be used because someone made a blog 5 years ago with the same name, wrote a single post and then forgot about it or deleted the whole blog.Why should WP users be subjected to having to create ugly letter-number-dashes URLs because of a policy that hardly anyone can find reason behind it other than the WP staff? How long before people turn away from WordPress precisely for this reason?
At the very least the option should exist to send an email to someone who has an inactive blog for so many years or who had deleted his blog ages ago and politely ask for his consent in releasing the url for someone else.If he says no then so be it, leave it at that. But where is the harm in releasing the URL if he does say yes?
I think it's about time WP sets up a formal poll for this issue so that all users can say what they really think about this instead of having to rely on forum posts like this one which soon get drowned in the sea of forum topics and dissapear from view.