Suppose I die taking my wallet keys with me; how do my heirs inherit my NFT-ized house?
If the government is minting these NFTs and deciding which transfers are legitimate and which aren't, why are we bothering with all this?
Basically: at some point, an NFT will become separated from the ownership as recognized by the people who count (banks, governments, etc). Without a mechanism to reunite them, the NFT is not very useful; but if there is some sort of mechanism, it's really that mechanism that determines ownership, not the NFT and you might as well use a centralized ledger.
It’s important to understand that these tokens aren’t going to replace the existing legal system (much though the anarchist/libertarian wing of the crypto community might wish it). They just enable certain transactions to occur with lower overhead and time delay. This is about improving friction in the happy path, not providing new solutions for every conflict case.
Personally I don’t think there is a reason to put your primary residence one the blockchain (you don’t trade it that often). But it’s interesting for places where you might want to trade assets at higher frequency (eg micro loans, supply chain finance, etc) and maybe there is a real-estate trust angle too.