I think that the problem with this approach - though well-intentioned it may be (as I too love the idea of emergent play) - is that players do and will frequently think about their characters long-term, often because their sense of character concept may be tied to long-term goals that cannot be realized at the point of character creation.
In some cases, yes.
In others, however, they'll look at the long term in part because the system kinda tells them to. It's a bit hard to explain, but in 0e-1e-2e the game was open-ended - sure you could set a goal for a character but it wouldn't necessarily be tied to level or whatever, as there'd be no way of knowing how high a level the game would reach and-or how long it'd take to get there. 1e's name-level stronghold idea was a bit of an exception, but even there the only real mechanics involved were character level; and the character could still be played during and after that process - it wasn't an 'end' so much as a 'stage' or 'phase', and the game could in theory go on forever. Other than that, you couldn't really plan ahead very much and had to take things as they came and work with that.
But 3e, echoed by 4e and 5e, is presented as a more closed-ended system: 1-20 in 3e, 1-30 in 4e, back to 1-20 in 5e*. This changes the perception a surprising amount, telling the player in effect to expect a certain number of levels and thereby implying that planning out your PC's development through those levels is accepted, if not outright expected. Paths and Destines just push a little harder in this direction, as did the concept of prestige classes in 3e.
* - yes these systems all have options for beyond-the-end or 'epic' play for levels higher than the stated limit, but out of the box they're presented as closed-ended.
And we can see this problem in 5e as well. I may see my character as an Arcane Trickster, but assuming that I do not take alternative routes,* it will take me until reaching rogue level 3 before I get the bare minimum to reach my character concept.
Taking a while to reach one's full character concept is kind of a fact of life in many cases in all editions, and I'm cool with that as part of the fun can be watching your character grow into itself, as it were.
That said, while I liked the idea of prestige classes when I first saw them the bloom has long since gone off that rose, largely for just the reason you state: to become one thing you have to spend a bunch of time as something else. I'd far rather have all classes start at level 1 and have done with it. (and even with the 1e Bard, the original prestige class, I long ago redesigned it to be its own class just like the others)
IME with 4e, however, most players were not pre-planning their Paragon paths or Epic destinies. They would certainly have several in mind, particularly when it comes to prerequisites, but it's generally not pre-planned. Again IME, most players in 4e were looking at their next few levels of powers that they could potentially choose rather than long-term destinies.
Good to hear.
Re the party lost in Niflheim:
Sounds more like a buzzkill campaign.
End of party didn't mean end of campaign - they all had other PCs in other parties in the same world and overall story, so we just jumped to one of those.
There was even some talk later of sending another expedition down to try and rescue the first one, once those still alive had realized their comrades had been gone a long time and done some divination to find out what became of them, but the overall campaign ground to a close before anything ever came of this.