That sounds prohibitively expensive for things like news.yc (does this site produce money at all?), or my blog, or fark, or any other site that isn't backed by some sort of multi-million-dollar corp. and generating a couple million uniques a day (or more).
My prediction is that, especially at that cost, this will fail MISERABLY. .com will still remain the brand-name, and anything else will be a generic.
Similar to .net, .biz, .tv, .anything other than .com
What really needs to happen is for icann to have a review board that can determine if cyber-squatting is taking place or not.
The board needs to exist because a 16 year old sitting on theirname.com because they haven't bought hosting or anything yet, and a company that is sitting on a few hundred THOUSAND domains hoping to sell them are drastically different. I am perfectly fine with the former, and believe that the latter is a cancer on the DNS.
Basically their needs to be a terms of use that prohibits cyber-squatting.