So merchants will be ok with supporting bitcoin transactions for drugs, porn, alpaca socks, and their competitors, but not for domain names? What's the difference?
When you track the transaction history, you aren't doing it pointlessly. You need to know the history of all coins so when one of those coins comes to you as payment, you can verify it's legitimate and not an attempted double spend. This is fundamental to BitCoin and accepted by everyone who runs a node. The only way to prove the absence of transactions is to be aware of all transactions.
If you are already happy with the existing domain name system (or whatever), you don't care about those transactions. You aren't planning on taking part in that system so those domain names will never "come around" to you. You also don't care if somebody else owns any particular name. It's additional expense that gains you nothing.
I think you're overfocussing on the DNS case. There are several possible use cases for alternative chains. Nobody will care about all of them. Some of them may involve significant amounts of data, far beyond a DNS system.
I care about his technical opinions, but I don't recall him presenting any technical reasons for not putting non-bitcoin related data into the main chain.
Then you need to re-read his posts. The technical reason is that trying to combine every possible proof of work based quorum into a single chain does not scale. This is not a matter of personal preference, it's about solid engineering.
It's not because people want to pay for domain names (I think most people, including myself, would much rather get them for free than pay for them). It's because there needs to be an incentive for people to work on the block chain.
If the names are free then somebody will just do a dictionary attack on the network and claim all useful names.
But regardless, if for your 0x6763 chain you don't want to charge any coins you don't have to. Miners don't need much incentive to work on alternative chains as long as the CPU cost of receiving and verifying your transactions isn't too high. They just connect your software to BitCoin and their mining hardware works on both simultaneously. Beyond an hour or twos setup time nothing more is required.
So you leave out the one that actually gives people incentive to work on the DNS block chain... Obviously you're under no obligation to provide such a solution to us, but it's the most important part! You went through all of this trouble making this post, but left out the most important piece.
I left it out because the post was already too long and the overhead of joining a second chain once you do mining on the first is so trivial. Believing in "the cause" is probably enough. It got BitCoin bootstrapped quite fine after all, BTC was not always worth $3.
Regardless, if you believe your idea is so uncompelling nobody will join you unless they get paid, there are designs possible which allow for it. I'm about to head out for the night. I'm sure somebody can propose one here.