That's a problem, surely, as it means all domain names become owned in perpetuity. That's good if you don't want governments to be able to have control, but it doesn't fit with current systems like Trademarks, but also just if there was an error or con that caused a domain to be transferred that you want to reverse. Also, over time domains become lost; which is sub-optimal in a limited namespace.
The current DNS is a bit like having HTTP everywhere, we need to upgrade to a more secure scheme.
The part that blockchain addresses would actually get generally worse: typosquatting is already a problem, but at least most registrars are working to limit it - some more proactively than others. ENS removes any ability to prevent typosquatting at all. I have never heard anyone complain that registrars or governments are being TOO proactive in delisting typosquatters or those using domains they don't own the trademark for.
Maybe you're thinking of trademarks as some bureaucratic intellectual property nonsense but they are practically important as well. I could own ycombinator.com in that system. What would you do about it besides changing the name of Y Combinator?
I do think their importance is vastly overstated yes but that's another debate.
Right now domains are also suspended for a lot of reasons, typosquatting being pretty much the only one I would describe as a valid reason. And the downsides of allowing domain suspension seems greater than the upsides.
I'd be okay changing my mind on the subject if DNS was used as intended and not as a political tool to suppress newspapers or block pirate websites.
We take a free internet for granted, but in places like China, the government knows exactly what you're doing on the internet. They have to, because they route your packets, and they won't send your packets to places they aren't already spying on. No technological solution can change that, except possibly by constructing a physically parallel internet, and that stops working when...
An FSF member recommended Tor to Uighurs. An Uighur responded: "You don't understand. They aren't just monitoring my Internet. They're living in my house."
I'd argue that historically it's the opposite, most social changes came from technical changes.
It's not about making it impossible to block websites but to increase the cost of doing it further.
There's a lot of in between places from Sweden to China and raising costs of doing the bad thing globally works.