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The Daily Grind: Characters go around again?

One of the features that's become more and more de rigeur for single-player games is the concept of a "new game plus," a second go-through of the game with all of the abilities and equipment you picked up the first time around. In some cases, you can't even actually play the full game until you've managed to beat it once, at which point you earn a number of rewards that would have been useful to beat the game the first time around. (Insert your own jokes about boss loot here.)

Kill Ten Rats recently suggested the idea of allowing a similar mechanic in MMORPGs, borrowing from games such as Torchlight that allow you to retire a character and pass benefits on to a new one. Certainly it has advantages -- we've all had a character or two that's sat at a level too high to be deleted that we don't want to play any longer, and it'd be nice to pass along something useful for the playtime. On the other hand, a forced cycle of leveling followed by retirement followed by another level grind could get tedious quickly. What do you think? Would this sort of feature be an enjoyable way to expand your character stable, or a searingly obnoxious grinding treadmill?