First off, this grossly misunderstands what a certificate does. All it does is prove that your browser is having a private conversation with the remote server. The remote server might be evil, but that's not what a certificate solves.
Malicious sites didn't have valid certs because certs used to be overpriced and the people that ran them wanted to minimize the paper trail as much as possible.
> Self-signed certificates used to be considered fine, but now every mainstream browser shows a scary warning before entering a site with such certificate. The same will happen to the certificates from Let's Encrypt
You're jumping to quite the conclusion.
Let's Encrypt is such a huge part of the Internet now that I don't think browser vendors could decide to just stop trusting their certs. Even if they did, another free certificate vendor would appear and we'd be back at square one.
> Phishing websites also did not have lookalike domains before unicode characters were allowed in domain names.
Factually incorrect.
I have to be honest, this feels like a troll post. There's so much misinformation, misunderstanding, and unrealistic expectations that I can't take it seriously. What you're asking for is dangerous and would lead to massive amounts of data compromise.