When I gave her an iPad I realized I could create an account on one of my machines and use it to control her calendar and contacts via MobileMe. So I added her back using her old username.
When I did that I was asked for her old password. I still had it in my pw database, so I reinstated it. All of her old contact information was still online. Nothing had been deleted.
I had a similar experience with an old .mac account of mine. When I went to MobileMe I couldn't use my old discontinued .mac username -- because I'd misplaced the password. If I still had it I wonder if I'd have found my old .mac data still intact.
I don't know if, outside of a family account, terminating the account truly removes data. I do know that doesn't happen inside a family account. I also know that you never want to lose your MobileMe password even after you stop renewing. You'll need it if you ever want to resurrect an old user name. Apple doesn't reuse them.