I decided to read on anyway. It's clear that the author has put a lot of care into this post and is doing his best to come up with an idea that can bridge the gap to his detractors. Unfortunately, I fear he is still missing the point.
Banning websites will not stop piracy. Just as CD protection, hardware dongles, remote authentication, signed binaries and every other technique under the sun only serves to frustrate legitimate users, so shall the specter of the SOPA DNS censor be memorialized upon the ash heap of history.
The author and those who think website bans are a solution need to realize that bits are the cheapest commodity on the planet. This is a fact of life. There is no getting around it. I said this in the last thread and I'll say it again: if the full value of your work can be represented in totality as a string of ones and zeores, you must accept the reality that computers, the most ubiquitous machines on the planet, are all designed to push around ones and zeores. Any solution to copyright woes that involves attempting to stop the copying of bits will fail, it's like trying to insulate current by attempting to dry water. Every effort in the field of computers over the last half century has been aimed at making it easier to share information, there is no effective censorship solution in a world where information flows freely.
By the time the author's proposed bureaucracy can be established and come into effect, the tech world will have moved on to the next data sharing revolution which will simply render the DNS ban irrelevant for pirates. Those who shall suffer a loss of free speech under the inevitable abuse of DNS bans will simply be fucked (since they follow the law).
Find a way to create value that isn't inherently rooted in the order of your bits.