Firstly, I'm gonna start with saying Arelith has 100% made mechanics important on this, a roleplay server. I don't think it's so vitally important that you can't have fun and engage in both roleplay and the PVE aspects of the game if you make something that's suboptimal, but let's be clear:
PVP is narrative control. And on a roleplay server, what you do and how people perceive you affects the stories you make. There are just some stories and some narratives you don't get to participate in at all if your character sucks in PVP. There are some character concepts you just can't go with.
You don't get to be a shining hero and defender of the weak if you lose all the always. You get to be the loser. Who loses all the always. There's merit in RPing that, but if you're incapable of playing the alternative and you want to explore that, you uh can't if your character is built badly enough.
Luckily, in my experience, having a good build doesn't necessarily make you a PVP expert either. I've seen people with pretty good builds and sweaty numbers and beaten them with suboptimal builds just b/c they didn't have a lot of practical experience running that build and dealing w/ the downsides, or because they didn't have the right combat buffs/didn't know how to deal with common PVP tactics.
Now that my rant is over, I wanna take a look at the flipside of this coin, since I hinted at it already; Arelith is its own variety NWN PVP, and some people coming from other NWN servers might have an idea of how NWN PVP plays out, and they might be able to use common NWN PVP tactics to get ahead, but struggle to make a good build. A lot of people who come to Arelith seem to come fresh without much NWN experience at all, though. No amount of perfect building is going to make them great at PVP overnight. PVE content can be difficult to do alone, but most of it is geared to -not- do alone. So for characters who can't, I dunno, maybe roleplay and get a party?
I don't necessarily think that -setstat and -setclass, or the ability to relevel from 1 are going to fix a lot of the problems that have been brought up here. Really, what this does is protect a player's first character on Arelith, and my mentality is that your first character or two are going to suck. But even if you built your first character perfectly, if you suck at PVP, you're gonna keep sucking at PVP until you stop sucking at PVP. I went into Arelith completely blind when I first started playing, and my first character was a fighter 10 wizard 10. When I finally told this to someone who asked me what my build was, they damn near had an aneurism about it. Fairly, probably. I just rolled them and moved on when it became appropriate to do so.
If people are quitting Arelith after realizing their builds suck, that might be in part due to the current PVP culture we have. I was mocked pretty mercilessly for how I built my first couple of characters before I knew what I was doing, and I can see that being a pretty big motivator for people to leave. It sucks to have to start over. It sucks worse when you feel like you're holding your group back by -not- starting over.
When I had a character I really enjoyed playing, I just -remake_character'd. That character's Ester, and I've remade her twice now. First, to fix the horrible mess she was, and secondly, because she became mechanically unviable due to a shift in the meta. Releveling from 1-30 takes awhile, but it was an enjoyable experience both times and created a lot of interesting roleplay opportunities for me.
Award characters might be a different story, but honestly, I'm fine with it. Turnover rates of award characters are low enough that one of the ways that award characters end up retiring is by shifting mechanics making them less viable. A lot of the times, these shifts are minor; only changing values +/- about 2. But it's enough that people don't want to play those characters anymore. Personally, I don't see a problem with a bunch of odd award races populating Arelith, but them being awards at all suggests that award races shouldn't be the norm anyways.
TL;DR -- I just don't think it's a big deal to lose -setstat/-setclass, and I don't necessarily think it helps new players out all that much.
Anyways, characters are like sand mandalas or something idfk.