@amightywp - It's not just frustrating for me, it costs you customers, so it should be frustrating for you as well. There's no good technical reason that an account that created a username (which by all accounts is then forever locked, eliminating any potential for conflict, which would be a valid reason) can't reactivate that same username. Identical logic goes for a subdomain (in fact, since you lock subdomains you should offer to forward the old subdomain to the new one for a fee, a missed opportunity).
I should note that I was going to be a paying customer (Pro bundle at a minimum), not riding on your free service without add-ons, so prohibiting me from using the name that I myself registered on your service seems... well, like a rather poor business practice. If I liked the service enough perhaps I'd have migrated to a self hosted WordPress instance down the road and bought even more stuff from your company and developer network... though the reason I wanted to use the hosted solution was so I didn't have to deal with the hassle of patching, etc. Most of my previous experience with WordPress has come in the form of self hosted installs being widely compromised due to security vulnerabilities or misconfigurations. Using your hosted version ensures that it's appropriately monitored and patched, lowering my risk profile.
While the 'solution' of using my own domain is great and all I'd rather use the WordPress.com URL for now (though I'd probably set up a subdomain redirect from my site), for a variety of reasons... yet this ill-conceived policy prohibits me from doing that. It also seems, no offense, unlikely that your response is completely accurate... my username shows up in forums like this even if I use a custom domain for my blog, correct? What about when I comment on other people's WordPress.com hosted blogs, will that also display my custom domain or will it show my username as it seems to now? The impact of an incorrect username is not irrelevant, as the responses to this post seem to indicate.
Is there anyone I can talk to who might actually be able to resolve this? It's not a technical issue, it's a policy one. I'm attempting to give WordPress money, probably hundreds if not thousands of dollars. And I'll send tens of thousands of users to your site every month, which has analytical value to you as well. If WordPress doesn't want my money or traffic, that's fine - just delete this thread, there are plenty of other solutions... but if you do, please have someone contact me who is capable of resolving this.