[donohoe]

There are pros to the current system.

That said, part of the issue you flag is just perception. It's like going with a financial services firm that has a Wall Street or "Fifth Avenue" address in New York City versus a firm that has an address in Hoboken, New Jersey.

Both might be fine but we often attach significance to an address (even if its just a mailbox).

To your last point, I think its ultimately good that (many) Country restricted TLDs have geographic restrictions.