the system is fine, it protects a lot of people from losing there accounts.
you should always create characters you will remember anyway! whats the point of having a character name with 100 different special characters in it?
my first gw char for instance was Trinity
That's (part of) the point I'm making - I couldn't create a character with a name I would remember because of the restrictions in place, for example "Trinity" would be illegal because it doesn't contain a space. Character names have to be two words (for new characters at least), and I didn't want to use my real name (or the name of any real people for that matter).
I didn't put any special characters in, I could correctly remember the first name of my character, I just couldn't remember the surname (that I didn't want to have to enter in the first place). Don't forget that as the game is around 5 years old, most 'normal' character names are already taken, so you have to be quite creative (thus making it harder to remember). As mentioned, I wanted "Hang Time" but that was taken. If you put yourselves in the shoes of a literal complete newbie to a game (and genre for that matter), when you have just installed a game, you are itching to get started, you'll want to get your character up and running and see what the game is all about, not faffing about worrying about what your character is called.
Actually if you think about it, if character names are being used for security, that implies that if security is so paramount, you SHOULD be using special characters (if possible) or at least non-dictionary words for character names.
Also, one thing I perhaps should clarify, is that when I setup my account I entered a character name that I'd intended to use and ticked the remember my username and character name boxes. However, it wouldn't let me create a character with that name, so next time I came back to the login screen, it had of course remembered the 'wrong' character name. It never crossed my mind when I quit the game for the first time that I would need to remember my character name.