Should I set ASP.NET application pool to auto-recycle?
Unfortunately it is normal, though mostly dues to shoddy application writers than anything else.
IIS by default configures newly created application pools to recycle every 1740 minutes for this reason.
As you said, this is a band-aid. A well written application that clears up all of its resources (including dangling event handlers), shouldn't leak at all.
See this blog post about the subject.