Assuming of course that the account is truly idle and not being used to read without every interacting.
The inactive accounts that people are worried about losing are the ones that used to be active, or which were significant enough to make a lot of people follow them. However, the bulk of inactive accounts probably have very few (<10) statuses posted or followers, and deleting those is likely to be uncontroversial.
If I choose to squat the now freed up @foobar handle and not do anything with it, next year they can move my inactive version to @inactive:2020:foobar and free up @foobar again for the next person interested in using it.
Any way they solve this, there is a danger of people using bots to mass-squat liberated names to offer them for sale. I don't see any very good way around this. Possibly to give first pick to users with long-standing accounts that share a nontrivial common substring with the liberated handle. For example, if my current Twitter name is @firstname_lastname, and I really want @firstname, I think it might make sense to prioritize me over @random_bot_204safhq23.
(my relatives also didnt tweet very often but when they did they were amazing)
In the era of cloud computing, how expensive would it be to make an account readonly and store the paltry data it created in a cached location somewhere?
All of their tech decisions feel really reactive nowadays
The real cost of doing something like this is doing user research to figure out the set of human behaviors around the memorialization process, deciding where in the product to make the functionality available, training material for how it escalates up to human support teams, and what other things are on the team's plate at the same time.
Personally the permanence of internet content is terrifying and by far the worst aspect of it. Potentially there are people like me who would be at the table whenever "what to do with accounts of dead people" is discussed, strongly advocating for deletion. Lacking clear consensus they just left the decision until it had to be made.