That is a completely inept comparison. Domain squatting serves no purpose other than lining the owner’s pockets in what many would consider an unethical manner. Domain names are finite and cannot be replaced as a manufactured product can. A more accurate comparison would be buying every lot of land in an area, another finite resource, without any intention to use the land for yourself with the only goal of then marking it up significantly to milk a potential purchaser without adding any value to the transaction.

That's not necessarily true. A viewpoint is that the sales they are securing wouldn't have been made otherwise. For example, a website about high end electronics that is supported by drop-ship based ads for product purchases. Those sales might not have been made were it not for the visitor going to that site.

Also, an argument could easily be made for all the items on Amazon that are fulfilled my the merchant as being the equivalent of drop-shipping because Amazon is basically listing stuff that others are selling and shipping on their behalf.

Well this is worse because domain squatters take the domain and its no longer available.

surely lubricating the wheels that set prices is worth a reasonable fraction of your economic output. lets say 10%?