There's no location element in domain names. Also there's an indefinite supply of them unlike real estate.

The problem is that the real estate investor had to buy that land to make it into a parking lot. That's fine. Others had the opportunity to buy the land and do what they want with it. However, domain names are effectively free. This means that instead of 'whoever wants to pay the best price' getting it, it's simply whoever grabbed it first.

In summary, land is priced based on its worth. Domain names are all priced the same at a negligible cost (Initial sale). That's why the domain name system is so broken.

The supply of all domain names is infinite, but the supply of short domain names is definitely finite. That's why it's so damn hard to find good short ones.

It doesn't matter how you get the limited resource first. What matters is whether there is an efficient trading system for such resource. You can always buy a domain name from someone you want if you are willing to pay big bucks.

I'm not sure where this idea of domain names being infinite came from, but it isn't really true[1]. There is a maximum length per top level domain, and also a finite number of top level domains. Until we're allowed to register top level domains, it's going to stay this way. Even then, we will be limited by the maximum allowable characters.

http://en.wikipedia.org/wiki/Domain_Name_System [1]

I don't really think it's the same thing. They are making use of the land and providing a service to people (people need to park somewhere), not just trying to sell it to the highest bidder.