Banned names should stay banned yes, lurkers wouldn't be banned if they checked their email and received the warning and they responded to it. The main reason of this would be to weed out those who sign up and never log back on again as well as those who had a problem and registered and were never heard from again.
As Trotter said, an account with 0 post and no activity isn't much of a loss in anyones eyes. Posts should remain in tact yes but most people who have posts are either partially active or fully active, all others are users who no longer come to tech forums or have had that mighty ban hammer swing down upon them. When I said free up some names I didn't just mean for new people to use, it also makes going through the members list a lot less painful but banned names should never be restored unless an admin sees it fit.
My original idea isn't to delete from last post date but from last time they logged in, accounts have a feature that tells when they last signed on so even lurkers wouldn't have a problem.