When I first started SL I think you were only allowed 5 accounts if I remember right. You also had to have a credit card on file to join. If they had kept that up then I think SL would be a better place.
But since they changed that and it was so easy to create new accounts I just did. I loved making up new names and dressing up a new avatar. Most of the time my friends knew of my alts. I am not the type that can go around anyone I know (friends or enemies) without telling them who I really am. I never created them for that reason. If I wanted time alone I just would create an alt and go places that none of my friends hung out in. That's much harder to do in smaller grids. It was easy in SL. I still create new avatars but I always put my rl picture and my website URL in my profiles so people know it's me. I don't like for people to feel I am trying to be deceptive.