Fail. That sums up what i have to say. It kinda reminds me of an MMORPG deleting your characters after inactivity, which is hadrly done any more DUE TO COMMON SENSE but there are still some cases. What you're basically telling your customers is that their time and money is not appreciated, and that you don't even want the ones that quit back. Seriously, why should I or anyone come back to your service after you deleted my account? It's obvious that you don't want me back, is it not? 12 months may sound like a long and appropriate period, but if you plan to operate for any longer than that, this WILL happen, and you WILL alienate customers.
Oh, and it launched? Any "reviews" around? From the Escapist? Pretty please? ^^