I think permadeath ensures alt spam no matter how low a stat cap is set. The fresh spawn experience isn't fun after the first few times. A lot of it is tedious and there are points where progress stalls and you can't do much except wait until you have the LP for the next step. I strongly believe this could be a reason why people who try the game stop playing as well, however I don't have statistics on how many players quit after their first few hours never to return.
Additionally without some meaningful way of losing characters in combat (or otherwise) the game world would rapidly stagnate as people found they had no need to perform the tasks which make up the core of Haven gameplay. I liked the move toward objective based PvP in the form of the salt nodes etc. They were a character sink early on in the game world until people didn't really need them anymore. You have to appeal to the risk vs reward mentality of the player. Permanently losing a character is a big risk and most of the possible rewards from PvP are too small to compensate. There is only a few sadists and masochists who decide they like fighting just for the sake of it.