ccTLDs already exist and their respective countries have sovereignty over those TLDs: the UK can disappear any .uk domain name it wants from the global internet.
The .com TLD is American, and is therefore subject to American legal proceedings.
Ample precedent and prior case law exists that the US Federal government can obtain court orders to seize .COM domains. Going back 15 years now.
State government that's another question entirely. When people say "American legal proceedings", the distinction between state courts and federal courts have two very different regions of responsibility and authority.
This is not an "American" proceeding so much as a Texan one, and it's not clear that the State of Texas should have any jurisdiction over the .com TLD.
Verisign is likely to respond depending on how good they think the relationship is between Texan lawmakers and the current Whitehouse administration.
Multiple Internets over Internet time. Sadly. Some damage can't be routed around.
The latent ability of the United States to shut off some specific domain within a TLD is never going to cause people at large to say "We'll make our own .com with blackjack and hookers!"
In this hypothetical new system, other DNS roots would exist - and for practicality's sake, wouldn't collide with the "old Internet." Nobody is reissuing .coms, they will pick some new TLD or system entirely.. this today is known as a "ccTLD." Are people interested enough in true sovereignty beyond what ccTLDs offer? What does that even look like?
Why do most businesses enjoying .com domains today want to move to your system of control? Nothing can be truly "decentralized" any more than the DNS of today is: countries effectively opt in one way or another - the internet is a cooperative system, much like international diplomacy.
(XXX in this case)
It's the precedent it sets, and especially with the ... sensitivity ... in the US at the moment around 'opinions on things', this feels like it could be the first pebble of an avalanche.
Stomping your feet on the ground because something's not perceived as fair doesn't really change things.
China has its own internet with limited access to the global "internet," other countries are free to do the same.