I'm no domain registry expert but I'm inclined to agree with you on 100% of this. Who needs a domain registration to cyber extort? Pretty sure they just DM that type of material to the victim and threaten to DM it to others. Simple. Same for distributing illicit materials. Pretty sure it's either dark web or private groups on platforms.

These days especially it seems like nearly every measure relating to "cybersecurity" or regulation in the online space in any way is always hitching itself loudly to some form of child sex abuse - I don't blame these various lobbyists for trying, since it's obviously a winning formula. Bring up a universally loathed offense, explain that your new scheme is somehow "needed" to cut down on it, then shout down your opposition as "soft on child abuse."

It's the playbook used in 2001 when it was The Terrorists. I suspect that since moral relativism has resulted in many people being unsure if even the sickest terrorists, who behead their prisoners on camera with a dull sword, might actually just be misunderstood freedom-fighters, now there's a new favorite bogeyman, this one more resistant to political reframing.