It may be better than what we have now though.
You could implement a weighted trust system where you're more trusted the more people trust you, and consequently if you "issue" trust it's counted as more trustworthy than issuing trust to yourself.
So you could have the equivalent of CA's in a system like that, but the list could be dynamic based on total trust on the network, instead of being issued by a static list of 100% trusted parties like the system we have now.
This is largely a matter of the game theory dynamics behind this, but if one of them does something bad are the other parties more or less likely to revoke trust? If they easily revoke trust they're creating a dynamic where if they mess up in "minor" ways their whole business could get destroyed. The penalty for not revoking trust soon enough might be much too small to create a system better than what we have now.
I don't know, and I wonder if there's been any research on the various aspects of replacing the CA system with a trust-based system.
The main point is that each user should have their own trust graph, not that there is any single trust network that we all use. Individuals are the entities that make decisions, and any emergent authority that violates the trust of those individuals gets booted by enough they cease to be an authority.
The fundamental problem here is that most individuals don't want anything to do with managing trust. In fact it's not even that, it's that they don't know what trust means, they have no interest in learning and many of them are not even capable of doing so.
The problem that TLS and the authority system try to solve is "how do I set up a secure, trusted connection between two parties who have never met, one of whom has probably never even heard of a key pair". Individually managed trust graphs don't really help there. AFAICT.
>> any emergent authority that violates the trust of those individuals gets booted by enough they cease to be an authority.
Absolutely. But any system should be examined with game theory in mind, and I don't see that web-of-trust is necessarily immune, nor do I see that it pre-empts the kind of problem we see here - trusted parties acting badly for money/legal/government reasons.
I may be wrong, and would actually quite like to be.
Nice try, but now write up your defense against a Sybil attack. Someone could play a long con, gain a lot of trust, and then cause a lot of damage.
Ultimately I think we need something like the blockchain publicly associating a domain with a private key. Namecoins I guess.