DNS should be distributed. Eventually as the shadow P2P DNS system grows in response to the mainstream one being increasingly controlled and factionalized, it will become the dominant DNS system.
I've seen the idea of a distributed DNS system mentioned a few times but I still don't see how it would work out. What happens in the case of multiple people wanting the same domain? How are disputes between what foo.com points to resolved? With no central authority who collects payment? and without payment of some kind what it to stop someone from gathering up an inordinate number of domains as there is no cost to do so.
It stands a good chance of becoming the registry of choice for casual use, especially if it gets an official TLD, but otherwise it's a bit crazy to think it'd ever be used for serious concerns. It's way too shady.
What distributed DNS systems are out there or being developed? I only know of namecoin (the bitcoin fork).