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For it to be illegal I think we would have to have much stronger digital ownership laws. I would certainly support them. But for now a domain you "own" is just an entry in someone else's ledger and control is only enforced by contract for big players willing to pay.
There is a Ninth Circuit decision that domain names are a form of property

https://en.wikipedia.org/wiki/Kremen_v._Cohen

but it's tricky because the domain name registries and registrars have a kind of thicket of contracts nowadays that subordinates registrants' property interests to other rules and considerations. So I don't think a court would think that a modern-day domain name registrant has property rights in a domain name that supersede all of those contractual terms.

Edit: my recollection is that Kremen v. Cohen interpreted the legal defaults that applied because Kremen registered the domain name in an era when Network Solutions didn't require registrants to agree to a contract that limited Network Solutions's liability and gave it various explicit rights and powers.

I'm not a huge ICANN expert, but I think ICANN broadly thinks the status quo is preferable to one in which registrants had stronger, less equivocal property interests in names.

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Agreed, but I just wanted to say that essentially every single thing anyone owns is, and has been from the invention of tally marks on clay tablets, an entry in someone's ledger.
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These domains wouldn't be worth a penny if they came with a disclaimer that they can be deregistered or even taken over at any point. With a bit of luck, somebody could snatch popular last name domains and set up a catch-all mailserver.
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