If they decide to one day sell crypto domains like ‘.eth’ and ‘.tez’, they will be entering an extremely competitive market; and compete against marketplaces that trade any valid NFT (including domains) like Objkt.com and OpenSea, with commissions around 2.5%, no need for data sharing, and instant settlements. They would also be competing against custom contracts and OSS tools which may take no fees, and other directly peer-to-peer transactions like I outlined in my OP.
The point I’m trying to illustrate here is that there are reasons for choosing a decentralized and peer-to-peer system of digital assets & ownership over a purely centralized system, and blockchain is currently an ideal tech for this application.
You're assuming that the fees you pay Namecheap are representative of their costs. You could also say that Apple will never be able to compete with mid-range Android phones because iPhones are so expensive,. The point of a business is to make money, and the margin represents a big share of the price, so you can't just forget about it. The price / fees don't necessarily reflect anything about the business costs, especially in tech.
Blockchain-based solutions are usually cheap because they're either subsidized (like Uber was very cheap because it was just not profitable), because they offer a strictly worse product (almost no company wants a .tez) or a combination of both.
> Compare this to, say, Tezos domains: exchange and transfer of funds settled in ~30 seconds, without any need for currency conversion, across any ".tez" domain in the network, 2.5% commission (or 0% via custom contract), no private data shared with registrar, and very low transaction fees.
You're not comparing the same products. Namecheap probably doesn't sell .tez, and you probably cannot buy a .com via Tezos. There are big differences between TLDs, I didn't even know about .tez websites until today. If I receive a .xyz link I tend to think it's a scam. If I had received a .tez link before today, I would have thought it was just a weird typo.
Beyond this, assuming equivalent products, there's no technical reason for the Tezos solution to be superior. Consider this: whatever Tezos is doing, Namecheap could do the same using the same technology (they don't have tougher requirements, maybe short of regulations, but I don't think you're talking about regulation arbitrage here anyway). They could just use a blockchain but be the sole entity allowed to interact with it.
Namecheap can get away with higher prices, so they do (it's a business). On the other hand many blockchain-based systems are highly subsidized (I don't know if that's the case for the Tezos domain system), making direct comparisons difficult.