The system was designed to be hierarchical: as you go further toward the left (assuming LTR languages), each part of the name would tell you something more specific about the server. The name "somesite.com", for example, would be for a COMmercial enterprise called somesite, while "somesite.net" was for a NETwork service called somesite. Country-code top-level domains would let you know that you were specifically dealing with that country.
The .com and .net top-level domains have pretty much lost their meanings, as have some country codes, like Tuvalu (.tv) and Christmas Island (.cx). Without their meanings, the system does indeed make less sense than it once did.