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I'd certainly recommend doing it. It's something we keep tossing around doing. (easy in our case as all you pick at creation are name, password, sex and race. The only dependencies are sex-restricted races like satyr or siren.)
I'd try to keep the ability to create via direct telnet connection too for those who find and connect to your game from within a client like Zmud (via the in-client list of games).
Just generally, moving things to the web is Good I think. We use our Wiki endlessly for building and organization, do all our mob scripting via web apps, use the web for submission and review of writing and art contests, use the web for searching help files, etc.
--matt
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