We recently ran a script to recalculate post counts in order to fix things after our incident with the PM spam-bot a few weeks ago. For whatever reason, recalculating post counts resulted in a loss of post count for most members, as somehow the incremental post counting wasn't correctly keeping tabs on everything. No posts (aside from normal deletions here and there) were actually deleted...it was just that the inaccurate post count totals were corrected.
As for your question about the purpose of the Wasteland as opposed to deleting, it serves two purposes in my eyes: 1) It serves as a "what not to do" display to assist other users in making appropriate posts; and 2) It serves as entertainment value for some people, and leaving the threads visible but not counting towards posts and not able to be replied to makes them relatively harmless.
Regarding avatars, yes, a user would lose their avatar privileges if Wastelanding or deletion dropped their post count below the 500-post threshold. But it's pretty rare for more than a handful of posts by a single user to be removed from their post count in this way, so they would quickly regain their avatar privileges.
And boosting your post count should never be "a decision." Members should post when they have something to say, and the post count will rise by itself. If we do spot a user obviously padding their post count with little-to-no real content, we will delete significant numbers of their posts and send them a warning.