Is the increased freedom of character creation a problem?

Martyn Zachary seems to see this tendency as a narrative cop-out that attempts to make the gameworld closer to the player – to increase the game's immersion, if I'm allowed to interpret Zachary's meaning as I understand it – without the developers having to invest into the game's actual story to make it more interesting.
Bypassing the rather meandering background and side-issues that Zachary provides (more academic writing courses for Zachary, whom I take to be a literary criticism student), I'll jump straight to simplifying his main arguments against avataritis, which are: 1) character customisation cannot ever fully achieve the goal of having the character become an in-game copy of the gamer as the gameworld and its narrative put limits on the character; 2) character customisation removes the strive or urge to try to write better stories with better characters in them. Also, on an almost completely separate tangent, Zachary also criticizes the 3) existing tendency to reflect real-world diversity (race, sex) in in-game characters, even when this ethnicity doesn't actually bear any narrative meaning in the story, i.e. the games make things like cultural background etc. seem meaningless since they have no part or function in the story. (Zachary has additional points, such as proper terminology to use when talking about character creation and avatars enforcing stereotypes, but I'll leave them out of my entry simply because I've dealt with the danger of stereotypes before and am rather tired of the topic. Also, Zachary's criticism about the terminology and semantics is quite good in my opinion.)
As far as Zachary's third point goes, he is probably right. However, this is a situation that also affects the (American) TV and movie industry and is something that game developers merely have to live with. You simply have to have that black or Hispanic guy in your average TV series, even if the story is based in mediaeval England and the guy has no reason whatsoever to be there as far as the story is concerned. It is merely a sign that 'political correctness' has gone a bit too far.
As it comes to Zachary's first point, he seems to be under the understanding that gamers actually want to put themselves into a game and be fantasy versions of themselves in the gameworld. He goes as far as to say that character customisation actually doesn't have a role in anything but MMO games, as it is supposedly only there that different appearance has value as differentiating the characters. In response, I must begin by saying that Zachary seems to ignore the recent tendency of the melding of game genres which is actually the source of the influx of character customisation capabilities to traditionally simpler games, such as FPS titles.
Is the increased freedom of character creation a problem?
This influx comes from role-playing games, where gamers have pretty much always been able to create their own characters. They have rarely, however, attempted to make those characters in their own image. In RPGs there are races and species to choose from that have little to do with humans and their appearance and thus the argument that character creation systems are useless if they don't allow us to completely transfer ourselves into the gameworld is moot. This also is in direct conflict with Zachary's claim that character creation and customisation systems are only needed in MMOs. In a role-playing game the gamers are supposed to create a completely new character, with unique backgrounds and appearances, even personal goals and values that may differ from the gamer's own set of goals and values in life.
Continuing directly to the second point: when this character customisation is transferred to so-called simpler games, such as FPS titles etc. - which seems to be the genre that Zachary mostly considers in his piece even if he doesn't explicitly say so – it naturally becomes more superficial. After all, the stories in FPS titles are usually much simpler than the stories in role-playing games. Zachary, however, seems to argue that the character creation and customisation systems in themselves are the reason why the stories in games aren't progressing and becoming deeper.
This claim is false in at least two ways. First, it assumes that the developers would have been likely to write better stories if they had not been paying too much attention to the character creation system. This is hardly worth a retort, but let's just say that there have always been superficial game titles where the protagonist is little more than an observer, whatever his race, species or skin colour happens to be. It is just that now the gamers will have a chance to play around with the character's appearance before they enter into these same sorts of shallow worlds. If the character creation system didn't exist, the developers would likely just given the player a choice between a muscular male and a voluptuous female character (or just a genderless armoured character) as used to be the case in these sorts of games some years ago (and in some cases, still is). Therefore, the character creation systems actually enrich the experience that these sorts of games provide.
Second, if Zachary's claim were true, we would have fewer examples of games where the developers have created a unique protagonist and a story that revolves around him/her. However, we have several fine examples of games where the protagonist and the story are intertwined and one could not exist without the other. One fine example is the upcoming Alan Wake title, but there are many others out there.
I can list quite a few reasons why having a character creation or customisation system is a good thing, even if it doesn't always serve the story:
1. Some people really want to see themselves on the screen. In some sports titles you can actually paste your own photo on a blank template if you so wish and I believe this is also possible in some other games. In these cases, the reasons may be slightly narcissistic, but they are still valid reasons.
2. You want to create a character that is suitable into the story that the game is telling, but just give it an added personal touch – like a scar on a Mafia goon's face. The character is definitely not a reflection of the player and the appearance has little consequence for the rest of the story, but designing that character is still a creative process and provides an added experience to the gamer.
Is the increased freedom of character creation a problem?
3. In a game where the character is merely a means-to-an-end, for example in most platformer titles, you may want to design a character that is actually pleasant to look at while you play, instead of being forced to look at a character that the developers found nice to look at.
4. The best reason of them all: the game allows you to make a character that fits the role that you want the character to have. A pre-designed character has no place in an open-ended RPG where you are supposed to be able to choose whether you want to play a ranger, a mage or a knight. And, better yet, if you want to play a type of ranger that doesn't exactly fall in the same stereotype as the one the developers had in mind, but that the gameworld still allows you to design and play. In RPGs, the character creation is usually a very involving process and the gamers often imagine backgrounds, goals and values for their characters even if they are not fully supported by the actual gameplay.
Overall, I conclude that avataritis, as described by Martyn Zachary, is not a symptom or anything that we need to be worried about. If there are symptoms that can be related to avatars - such as gamers and forum members using them as means to hide behind an "armour of anonymity" - they may be more deserving of the name 'avataritis' than Zachary's definition is.