It was said there was a chance of Data Corruption and that could resort in total loss of the account. But they migrated the servers from Cali to Florida If I recall correctly and no one lost an account that I heard of.
I have no Idea why they are so stubborn about moving toons from server to server other than they want you to Spend more and just create a new toon on a New Server.
Had to look for a good facepalm image for this comment, I do not mind this space ghost one.
Those are two very very very very very different things. They may both involve the game's SQL database but that's about the extent of their commonalities.
To do what you ask requires a more technical amount of knowledge, moving from server to server does not require the knowledge of how the game's code actually works, moving a character from one server to another does. It's moving data from one database to another and ensuring that there is no overlap. Generally speaking when you're building the game you'd want to add this sort of functionality in, and it'd take time for someone who doesn't know the functionality to understand it and actually build a tool capable of doing this.