If you reserve lots of domains and wait for someone to want one of them so bad that he's willing to pay hundreds or thousands of dollars, that makes you a scumbag.
It's that simple, and it doesn't matter if this specifically falls under whatever definition of "cybersquatting" you want to use.
> As far as doing nothing, they 'do' something. Most have nameservers and resolve to something.
You can't be talking about "parked" domains that resolve to a page full of shit, right? Please tell me that wasn't what you meant.
> As far as demanding payments. That's funny, you want something but don't feel obligated to pay.
Seriously? We do want to pay. We just want to pay the normal price for a domain, and not whatever outrageous amount you feel like demanding for it. Feel entitled?! What the.. Yes, most of us feel "entitled" to being able to buy a domain at market value.
> I think first-come, first-serve is the least worst option and also is in line with the spirit the internet was created. Allowing anyone to compete at minimal cost.
By "compete", do you mean allowing anyone to compete in an auction for a domain you have, and others want?
> If you really cannot come up with a name or put up some money and buy a decent name perhaps you need to rethink what you're doing.
As I said, it's really freaking difficult. An ideal domain name is a .com that's somehow related to your product/service and consists of one or two words in English, maybe with a clever twist. These are the ones that have practically all been taken by scumbags like you.