I use my ISP's recursive DNS resolvers (or not); you use your ISP's recursive DNS resolvers (or not). Anyone that wants to track "everyone's" browsing has to track a whole bunch of ISPs (and 3rd party DNS operators) if they want to keep a database of activity. There is no central facility that has everyone's DNS requests, unlike (e.g.) MSN Messenger back in the day where all traffic was transferred through the central system.
Further, because of caching, it is impossible to get exact numbers on people querying DNS. So while the records for www.youtube.com are in a central place, the exact number of people sitting on their couches at home asking for the A record is masked by people's home routers doing caching and also their ISP DNS servers (which the home routers talk to) doing caching.
So there is no "central DNS" server that does hostname-to-IP mapping: there are (tens of) thousands--millions if you count people's home Linksys/Dlink/Asus routers running dnsmasq (or whatever).
The internet: I get a number (from a central authority), I plug into other numbers, a path to my number appears. Sounds pretty decentralized once I have a number it's up to peering.
DNS: I get a name (from some authority) under a hierarchy. To look names up in this hierarchy you start with sanctioned root servers (from a central authority) which point you to TLD lookup servers (sanctioned by the same authority) which are the authority for that level and so on until you get to your name. Doesn't sound very decentralized, the only portion that's decentralized is the cache.
Anyways to your original point: I disagree losing a layer or two of distributed cache servers (depending on the deployment" is "the biggest killer feature DNS has" and I think encrypted randomization and stepping towards end to end integrity are better "killer features" that haven't been able to take off with traditional DNS.
> Furthermore, several governments use DNS right now to block websites...
So it has to be air tight in standing up to the worlds governments to provide value over being unauthenticated plain text? Even in the cases of governments you'd be surprised how far making it more difficult goes in the volume of collection or how it makes governments have to explicitly admit they are monitoring particular traffic due to the way the technologies work.