You're right about the population thing shock. But PS1 allready was a ghost town long before PS2, i was allways under the impression the reason for that was the sub and that "nobody plays it so i won't sub for it" vicious cycle.
However i'm not so sure if the majority of PS1 vets still plays PS2. When i stopped playing regulary back in december (sorry umvs guys :/ ) there were still some to be found. But during my latest ventures into PS2 i don't think i even saw a single "veteran" title, let alone familiar names or faces.
And i'm afraid i have to politely decline the PS2 offer aswell, i simply could not find any "planetside-ish" experience there anymore.
Back when we didn't have threshold capping and some really awesome last stands, i have to say it was there for a bit. But now...yawnz. Last time i played it was like playing a lobby shooter with uneven teams, not to mention ad pop ups and gamebreaking bugs galore...nah man, gotta pass here.
As for "Free PS1", i guess we just have to wait and see how it turns out to be population wise.