I don't think it ever actually happened in my games, but if a player wanted to change PC, I'd let her do so freely.
Well, characters are important to story. Some might say that there IS NO story without characters. So asking to retire your character could put a serious crimp in your DM's plans. If that's the case, the DM's best option is to run your character as an NPC, or let you make the changes you want to keep your character around.
See, I can't get on board with this. The DM who puts a fictional character ahead of a real human player has social issues that aren't going to get solved on an internet messageboard. The DM's plans mean nothing; they're just a tool to provide enjoyment for the players. I assume - hope - that such DMs don't exist.
I don't DM to provide enjoyment for the players, I DM to provide enjoyment for myself and my friends. I don't put myself before them but I don't put them before myself.
That said, I really believe that my plans are not so important that they cannot be changed. As a matter of fact, my "plans" are normally about the playstyle, the campaign themes and flavor, and sometimes a few key ideas that can be either narrative or functional. My "plans" are not about things proceeding in a predetermined way, in fact I love using the dice and random tables to make some decisions in my place. In the same way, I love seeing players really determine what happens in the story, so that also for me it feels like watching a movie I don't know the ending of.
Player's entitlement irritates me when I want to set a classic western-medieval atmosphere, and a player insists in playing a Monk, or if I have setup a campaign in a world where magic is rare and powerful, and players demand to have magic item crafting rules or wands shops. I believe it's important for a campaign to have a flavor that distinguishes it from other campaigns, and I believe it is the DM's duty to choose the flavor (unless gaming in "kitchen sink mode", which is a valid option), so once I have set the flavors & themes, players should accept them. If their current pet character idea doesn't match at all, they should simply shelf it for next campaign.
But changing character mid-game in general is not a big deal for me. Does it disrupt the story? Then it disrupts the story, and I will do my job of adapting the story. Nowadays we have an example of a fantasy series (Games of Thrones) where the story is constantly disrupted by important characters dying unexpectedly, and still a lot of people like it.