Yeah, I more or less agree with you. While I thought it would be fun RP I was immediately worried that people would feel forced to go along with something when they might not even consider it legal. At this point, I've sent out a realm wide OOC message basically retconning this whole line of RP. I also asked if they would be okay with me "recreating" my character with the same name.
I think I understand your frustration with people "recreating" old characters.. It can be annoying when players rejoin the game (this one was a royal) and more or less expected people to treat him with the same respect he had back then. I can assure you this isn't the case. This is a small realm, and many of the characters are new. Only one or two of them would have known mine.
Again, without going into too much detail, the reason I want to be able to play as this character is because (due to recent IG events) he has a huge score to settle with people he once considered friends/patriots/etc. Think William Wallace after he is betrayed by the Scottish nobility (if you've seen Braveheart)
Bottom line, while I do fully intend to develop a new character, playing this guy is pretty much the reason I decided to rejoin the game. After reading about IG events I immediately knew I wanted to get right back into this character. Its a shame this "Cold Storage" thing wasn't around when I paused. It would have made things a lot more simple.