The small time owners will have no problem paying that. Who doesn't have $20 a month for their blog? Eat one less taco bell meal and you are good to go.
And it won't do much for the small time consumers who get 5-6 domains. It's bad...but not by much. The only people such a price would hurt are the guys with 2,000 domains who'll go from paying $20,000 a year while making $180K of selling domains, to paying $480,000 a year, while still making the same $180K a year(prices will increase, but not by much...can't very well ask $500,000 for strawberries.com)
This will free up a ton of short term domains from the guys who get exact match domains hoping someone will buy one(whiteweddingdresses.com, ipadsoftware.com, askhackernews.com, goodbookstoread.com). At $10/yr it doesn't matter if someone buys...at $240 a year you can only afford to keep the really good domains.
And this can actually happen. The registars don't control domains...ICANN does. All they need to do is bump up the ICANN fee from 30 cents to 18 bucks for the .com and bam instant market correction.
And with all the money ICANN will get, they can create a free domain extension...i.e. something like .web. And the rest can be spent on improving internet infrastructure world wide...laying fiber, so anywhere in the world you can get 1gb/s.
ICANN is a non-profit...it should be doing more than just solving domain disputes.