Satoshi proposed a brilliant solution to the chain problem long ago in the thread.(As well as appamatto but Satoshi's solution is much simpler) We don't need to worry about integrating those information in the bitcoin chain since we can use the same miners to generate 50 BTC and domain name coin.
Only execution will give us something to work with. Theorists are just that, theorists. If the ideas don't get implemented, the idea of BitDNS is simply worthless.
The problem with 'domain name coin' is that it doesn't make economic sense. There should be no 'restriction of supply' of domain names. The cost of a domain name should be directly related to the network cost in supporting that domain. Transaction fees make much more economic scene than a new 'domain coin' as the network compensation mechanism.