While far from perfect the existing system has many properties that are good enough.

Protecting against malicious users grabbing all of the good names first using zero-trust blockchain networks requires the protections we all know against Sybil attacks. These protections are problematic for numerous reasons I don't think I need to enumerate here.

The point is that not solving that problem results in a system that is far less complicated and resource efficient. Some times the better solution is to rely on social/political/judicial systems instead of protecting against hypothetical malicious actors.