[heheocoenev]

You register a domain by spending namecoin in a reg tx, which becomes immutable in the bc. Problem is that when a court says Cocacola.blockchain_namespace is the legal property of the Coke, and the owner is some kid in China who won't hand over the keys, no Corp would use it for DNS.

Names should be strong to prevent spoofing but not so strong that squatters and unlawful holders of keys can disrupt their legitimacy.

[dpark]

So basically it doesn't at all solve the problem. Immutable domain names are not a good thing in general (though certainly in specific cases it could be), especially when as you noted squatting is inevitable.