We can leave other tld's for things that aren't worth $8/month to their creators.
A creative individual can come up with a new, memorable name. If you have a service about pets, then pets.com doesn't have to be your name.
For example, a friend really wanted [firstname][lastname].com, but there happened to be a hugely popular singer with this name, so he went with 1[firstname].com, resulting in a short, catchy registration.
In terms of land, you can't just create it (and in terms of reclaiming land from the sea for example, that land is considered capital).
One's target audience generally has a harder time picking up and remembering completely made up names.
1. The domain name is not worth $8/month to someone else
2. The domain name is worth $8/month to forgottenpass
3. The market for domain names is inefficient
Squeezing out squatters also squeezes out anyone without means from domains they're not using for commercial purposes.
I already spend too much money keeping things online. Of the handful of domains I don't do much with, one is just for my primary email account. The same name is registered on other TLDs so there would probably be some demand for it. Am I making a "useful" enough use of it? There isn't even a web page on it. Am I "producing" enough "value"?
Or am I expected to lose a domain because someone else could use it to make money? Or simply because they could afford to spend more money keeping their stuff online than I do? No, that guy can go fuck himself.