I think you mean landlords, not squatters. Squatters are the people who occupy owned property without permission, landlords are the people who hold property, do nothing, and collect profit.

In the context of domains, a domain squatter would be more like someone who holds and keeps a domain without any intention of actually using it or taking it knowing someone else might have use of that exact name, they just want to sell it later for more money. In real-life I agree with your definition though, I guess it not 100% comparable, bad name that got stuck.

Digital piracy has little to do with real life piracy and yet the naming stuck too somehow

Domain trolls. Similar to patent trolls that buy patents only to resell or license them.