That may be the intention in theory but it doesn't seem to work in progress, perhaps because so many real, normal names are taken and derivations need to be used.
Like, okay, look at the holds for the upcoming game gents. You can find them here. (Warning, this is a porny game, and may have NSFW text on the hold page.)
That is a game that requires IC usernames, and if you look over the holds, you see mostly unintelligible UNs that "count" as IC. (There are a couple of OOC names there, folks who I assume intend to change journals or hadn't read the rules before holding, ignore those for the sake of this conversation.)
I don't see any where I could actually pick out the name and say, "oh, yeah, this character name is [John Smith]." With vowels omitted and whole chunks of words cut off, they don't make any obvious sense.
Now, sure, once you're in play in a game like this, you can check their profiles and see, "Oh, this character's name is 'Edward Kinney,' now his username of '~wrdknny' makes perfect sense." But if the idea is to have people not need to check profiles, the current trends doesn't work to that end.