Fridge Logic: If the Fateless One was truly beyond fate, how was it possible for his/her creation to be foreseen by Agarth? This implies that in some sense Fate itself had become suicidal and had engineered the means for its own demise.
Or maybe Fate was bored and decide to allow a wild card to be created just to see what'd happen if he let someone he had absolutely no control over run amok in the world. Think of it this way, knowing exactly everything that's going to happen in advance makes for a pretty boring existence.
I think that it was less the Fate of the Fateless One, but rather the Fate of the Well Of Souls. So Agarth or the other Fateweavers would see 'Yes, the Well of Souls will work once, and then get blown up.' It's just when they look at the fate of the person that did get ressurected do things go off the rails.
That seems to be it. Note that the Fateless One's creation immediately changed things, such as indirectly preventing the death of Huges.
Also I think Tirnoch needed the Fateless One's power to escape from her cell. She saw that the only way for her to escape was to have a Fateless One show up with plenty of power, suck them dry, and then break free. So she let the Well work, once. She just didn't count on her key to escape, also having the power to beat her once and for all.
Worth noting: Nothing suggests that Fate is a sentient entity. It's a force not person, guessing at it's motives is pointless; it doesn't have any.
Also: All the NPCs keep telling the Fateless One that he's been resurrected. But he wakes up with complete amnesia and at no point does he regain his memories, and it's also implied that the original had a markedly different personality. So is the Fateless One truly Back from the Dead... or a completely new person who merely looks like him?
Given that the story hinges on a returned individual (see below) it's unlikely. Amnesia often results in a personality change.
Fridge Brilliance: The Fateless One lacked a destiny because it was already fulfilled, death being the fate of most mortals. The story being over, what was left was similar to the blank pages at the back of many books or an entirely new book.
The game's story actually is a pretty funny rip on the nature of video games, especially the Elves. Think about it: constantly repeating stories, doing the same thing over and over again...
The vast majority of the game's monsters are described as fae creatures. That's why they keep respawning—they're resurrecting. Of course, that doesn't explain the mortal enemies, but still.
The mortal enemies are just being replaced by new recruits every few days. This also explains why they keep picking a fight with someone who has already killed hundreds of bandits before them.