It's a human-readable addressing scheme. At some point, words will be used. The more memorable, the more usable. All those words that were "too important" to be used as TLDs should be allowed as TLDs precisely because they are important.
TLDs should be open to any string of characters, unicode if possible, and registrars should have universal single price registration fees for any site on any domain.
If in that nightmare world .llama should be bought by a fad in comfortable footwear, depriving some Llama rancher's association of their god-given rights to address space, we will just have to hope Mother Earth will somehow learn to heal.
Instead of imagining future conflicts, we should look at TLD behavior right now. Look at the rise of super short TLDs flooding profits to random countries. It might make you realize that appending the meaningless ".com" at the end of everything is a giant waste of time, since people will pay so handsomely to avoid this, all proceeds to random lottery winners like Tuvalu. (Nothing against Tuvalu, who undoubtedly needs the money for boats to leave their poor drowning island.)
If you look into what consumers want, instead of the complaints of a few random interest groups, it'd be clear we should somehow be able to go to "google" instead of "google.com" or "wiki" instead of "wikipedia.org" or "bit" instead of "bit.ly." Chinese users should be able to spell Baidu in their natural language, without resorting to a half-assed toneless Westernization.
ICANN's biggest mistake is not going far enough. They should chuck the whole TLD system and start from scratch, driven by the revealed preferences of those who actually browse the internet.
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