This post contains spoilers for Imperial Taris in The Old Republic.
I like Thana Vesh. She's a Sith introduced in the Imperial Taris storyline, the apprentice to Darth Gravus. I find her very funny. She's like this angry Sith kitten, fluffing up her fur and pretending to be a great cat. She's terribly proud, terribly arrogant, and has a habit of getting in over her head.
She would have been an outstanding recurring character. Every couple of planets, she could pop up, engage in a battle of insults with your character, and then stride off.
However, that will never happen. At the end of Imperial Taris, the player is given the choice of killing Thana or letting her live. Because she dies in many storylines, she effectively cannot appear in future planets, even if she lives in others. At most she can send an email, or some other easy method which is easy to implement. In a lot of ways, it sort of ruins the choice of keeping Thana alive.
Essentially, it's too much work to add Thana in only some of the stories. It's much easier to introduce a new character that works for everyone.
Because budgets are limited, every time a game offers a choice, the future is constrained by the most restrictive option. This is especially true for life-or-death choices. If one choice leads to character dying, that character is effectively gone from the story, even for the players who choose to let that character live.
This isn't always true, of course, but it requires double the work to reuse a character that may have died. Thus it is something that will be used sparingly, if at all. I believe some of the class storylines reuse characters that were spared death.
I think storyline-based games would be better off to avoid such extreme choices, especially for notable characters. Offering players the option of killing important NPCs seems like it is empowering players, but only ends up constraining the future. It's not really much of choice to spare someone if they never appear again. They may as well have died.