A character architecture in which no character has any particular expectation of long-term viability already sets up for less character identification, working directly against what you said you wanted originally.
I agree. But I'm usually ready to move on after 200-400 hours of playing one character anyway. Ready to try another build and put on another skin.
One might ask the entirely legitimate question of whether those majority of characters deleted happened soon after creation, representing someone basically abandoning the game because they didn't want to deal with the set up, or characters who had been long present in the game and whose players wanted to delete them to move onto a new one (assuming one player per identity, which is in no way more likely than the other alternative), or just in a fit of pique.
You can see the list here: http://forums.carrionfields.com/dc/dcboard.php?az=show_topics&forum=28
All of these are for level 30+ out of 51, so none directly after creation. There isn't a limit of 1 char per player, so most are likely due to more interest in another character. (AUTO) means the character was abandoned for an extended period of time. You can click on any name and see how many hours the character had been played.
You are going to have to define the context of what you imagine more competition would look like, because "more competition" isn't really well defined.
By more competition, I mean depth of strategy and depth of tactics. Other players provide the best competition, in my opinion.
I can say that, by and large, the markets for games have spoken, and direct competition doesn't seem to be what people want for the most part.
The top four most popular online games right now are all direct competition, and all have more active users than World of Warcraft: Dota 2, Overwatch, Hearthstone, and League of Legends.
If we're concerned about the overall marketability of this idea, the competition isn't the turn-off. It's the roleplaying. We're probably more likely to pull people into roleplaying by enticing them with competition than the other way around.