Penalties are Sticking With Domain Names
The following article points out a new problem with Google and their penalty vendetta.
Buyer Beware Situation When Registering Domain Names
I ran into a similar problem with a site that a friend gave me a little over a year ago. It was a WordPress site with a couple of pages of original content. We built a new theme and wrote 25 pages of new, unique content. Each article was 400 to 500 words in length. The site did get indexed by Google, but no matter what we did (all 100% white hat techniques), the site never showed up in Google search results. That was the first time I had ever seen that happen for a good site. Most sites get at least some Google traffic. The market niche was competitive, but not excessively so.
The point is that Google appears to be assigning penalties to domain names that do not get removed when the domain is dropped. Given that probably millions of domain names were abandoned by spammers after Google's attacks, there are lots of domains available that could be the kiss of death for Google traffic. Keyword rich domains are much more likely to be penalized because those are the names spammers focused on for years.
We never filed a reinclusion request because we are trying to avoid using anything related to Google. I suspect the site could have been saved with a reinclusion request. After a year we abandoned the site and moved the content to other sites that are getting Google traffic.