Character creation can be divided into two general categories when it comes to RPGs. There are those which are planned and crafted by the players from the start, and there are those which are randomly determined by the dice. Of course, this is not a perfect system of division: planned characters don't necessarily remain planned and in some systems can advance organically rather than according to the preordained order that the player has decided upon. Some systems incorporate more planning than others do, while other systems have no element of chance in character creation at all.
There are certain advantages to either system. Neither is "wrong," or without merit, but each has strengths according to its function. Planned characters excel at allowing a player to start a game with a fully realized concept. They get to play "what they want," using the rules to design a character that is as close to the one they imagined as possible. This is perfect for systems where most player-characters are exceptional or none are. The reason for this is simple: if you can be exceptional at character creation and you are allowed to plan, most people will be. This skews the demographic of player characters unless the system already takes this into account.
It's very hard to play a normal man in 7th Sea, for example, since you are meant to be a swashbuckling hero. Even if you avoid taking a sword school, you'll still either have a wide variety of skills or be very good at some.
If there's a chance to be exceptional, the system should be random. Why? Well, the strength of a random system is that you don't get to be what you want. You play as the numbers fall and therefore are surprised as much as the GM is about your creation. Call of Cthulhu characters, Hârnmaster characters, AD&D characters... these all incorporate a strong element of chance which allow you to fairly be exceptional once in a while because the dice told you it was ok. The limitation of the random generation process (that you take what you get) is also a boon (that you take the good rolls too). If you play enough mooks you'll most likely roll a paladin some day.
Some people complain this isn't fair, that they shouldn't be penalized for random dice rolls. Well, that's true, it's not "fair" per se. But then again, roleplaying games are inherently different from fair and balanced games like chess. It's when they attempt to be fair and level that they cease being fun. Players who have only ever had experiences in the make-your-man field generally have a hard time adjusting to the let-the-dice-fall character creation style.
The transition isn't easy for a reason. Make-your-man games encourage you to enter the character design process with a fully formed idea that must be expressed by picking a number of traits that add up to the character you were envisioning. LtDF character creation explicitly tells that kind of thinking to fuck off. You can't even really go into it with a character class or archetype in mind, since the dice are going to tell you exactly what you can and can't be. Oh, sure there are rerolls, but at that point you're attempting to inject a bit of control in an inherently random system.
My conclusion lies hither: if some option in character creation is meant to be particularly rare, the LtDF system is the best way to represent that. It's not fair to say that, for example, wizards are extremely rare in a setting and then do nothing to prevent every player from making a wizard unless your intention is that the players are always playing weirdos and outsiders who have special narrative dispensation because they are players.
That works in some games. It doesn't work in D&D. More on player-centered universes at 11 (or tomorrow).