The squatting isn't as bad as its made out to be, at least for some of the earlier name holders. Many where reserved early to prevent squatters and I've heard of a fair number of those being transferred for free (bitcoin related company names mostly). I picked one applicable to me at a very reasonable price and could easily have haggled lower, a namecoin developer was holding it so it was going towards namecoin development.
I fully agree here. While I'm not one of the "early squatters", I hold some names and will gladly give them for free (together with free help in configuration) to anyone who wants to set up a real website in earnest. I've already seen "statistics" like "oh look, what a mess, 99% of .bit domains are only squatted and not resolving to a website!" a lot, and think that this is mostly due not to squatting being such a bad problem, but because there simply isn't yet enough demand to build .bit websites. I'm sure that, when .bit gets more popular and more people can actually resolve it, this fraction will improve by a lot.