It seems like the policy was simply designed to frustrate as many people as possible for no real gain for the EU.
Your surprise exactly reflects the typical beliefs of a Brexit supporter, you thought the idea is you get to keep all the benefits you had before, and also you get rid of any downsides you didn't like, and somehow it's the EU's job to help you achieve this after you leave.
That didn't make any sense in 2016, and it still didn't make any sense in 2020, and so unsurprisingly here we are in 2021 and it isn't what happened. "We told you so" is boring but it's true. We told you so.
It just seems like a case of "we want it to be as painful as possible for you, even if we have to take a bit of additional pain for us too".
I guess an EU citizen living in the UK could also hold them on behalf of UK based UK citizens. Thinking about it this situation does seem a little convoluted...
From what I've seen the same is true on the continent. .fr and .de for example are highly popular in France and Germany. You rarely see local business reaching for .eu domains.
According to wikipedia, the number of affected domains is 344,584. Also compared to wiki there are 11M .uk domains and 16.5M .de domains. According to EurID[0] there are 3.7M .eu domains
It's just another $10-20/year and fixes your 'problem'
Many domain registrars will offer this service, as 90+% of their clients will need it for these ccTLD's.