The population issue is the exact reason they should go free to play!
Just charge monthly for EP accumulation, let people play for free without EP accumulation.
F2P games have HUGE populations, and while the extra players do cost a very small amount to service they bring value to the game by giving everyone else people to play with/against. Half of this game's balance issues are caused by lack of population, bring in more people with f2p and you solve that in one shot!
F2P are also ideally suited to something that this particular genre suffers badly from: the need for sheeple. PVPers in hardcore games like this like to kill people and make them lose stuff, there's never enough people willing to lose stuff as people wanting to PVP and win.
Froobs would be low-EP toons with poor skills that could provide a consistent player-base for the higher-skill paying players to farm. And since there's an huge enormous F2P base out there, it would be nearly never-ending.
It would be a win win all around.
(Gets dark in her without my torch!)