Spending $1000 a year for a domain is $1000 that gets cut from profits and $990 more than I'm willing to spend on a domain that's on standby until I have the time to work on my idea.
On the other hand I should have the first-mover advantage, because yes, I thought about that name before somebody else did.
Properties in general are cheap for first-movers ... I can think of dozens of places where I can buy land from uninhabited areas with a breath-taking mountains panorama ... for small prices like $5-$20 per square meter.
Prices get high sooner or later due to infrastructure developments, or increased demand, but thought luck, it's my property now.
And yes, for land you pay taxes ... but you're receiving services in return, like water, electricity, public roads, hospitals, etc...
So you want that domain name so badly? Pay me a sum I cannot refuse.
Sure it will cost you more than $1000, but that's life for you, and you shouldn't have a problem if your project is not a hobby :)