We lose the ability to innovate. The browser (Google) becomes the gatekeeper. And yes, we lose CNAME filtering.[1]
https://github.com/w3c/webextensions/issues/151#issuecomment...
Google is an advertising company. Chrome extensions already experienced a lost decade, where nothing much happened until the Manifest V3 "proposal". It's not a good idea to let Google hold the keys to anti-tracking tech.
[1] I stand corrected, DNS lookups are not part of webRequest in MV2 Chrome either. This doesn't change my larger point.