Players have a choice right now. And what are they doing? They're re-rolling alts on "The Fatman". What are they going to do if they could choose any server they wanted for a free transfer? They'll move all their abandoned characters to "The Fatman".
Really? Why? You never questioned that did you? It seems people at TRION have no problem allowing for free server transfers to wherever people want to go, for whatever characters they want to move. Rift has the same type of server layout: a bunch of "worlds" which use to have their own population issues as well. Now that is changing.
If you let people go wherever they want, multiple transfers, but limited by time, they'll eventually reach an environment where they're content or even happy. Some want to be in a place where the server is packed. Some want activity, but not sitting around an open world waiting for others to finish their quest first. And yet others want just enough to do some PUGs. And of course some people are happy on isolated servers since they do only PvE solo content.
You can't possibly tell me that choice is harmful to people's gaming. You either won't have a straight face when you say it, or you're lying to me and/or yourself.
This would be disaster. It's pretty obvious why they have restrictions right now.