People will just form a thousand LLCs or use straw men.
> Managed by a government institution or not-for-profit with open meetings, salary caps, public records requests, and other (legally-enforceable) checks-and-balances.
I think you're making this too complicated.
Just prohibit them from ever raising the price or changing the terms on an existing registrant. The cost of hosting goes down over time, so the price should never increase. If you started off paying $10/year, it never goes up, the end.
And then create more sensible top-level domains, like when they're industry-specific. Then there is more competition between TLDs and the value of good names stays lower, which discourages squatting because it's less profitable when good names are less scarce.