I agree completely.In the game you mentioned, Kestrel, most actually had two characters a'piece. Figured I would correct that first.
Other than that...
I think most everyone here is right in some way. Because... this stuff is really subjective.
But to me, it all boils down to this. A crappy GM and/or crappy players are going to make for some crappy character experiences, whether they have one character each or twenty. Conversely, a great GM and/or great players are going to make for some great character experiences, whether they have one character each or twenty. Letting players have multiple characters might give a GM more of a headache at some point, but only if one of those players turns into a flaky, crappy, ass-hat or if the GM doesn't know how to handle the number of characters he/she has allowed. And then again, that's not really a character number issue, it's a crappy player issue (which is something every roleplay has to deal with at some point if it hangs around long enough) or an unprepared GM issue.