The registrars are pretty efficient, if you ask me. I think that part of the system isn't broken. Yeah, if you want to save every penny, godaddy does that, at the cost of the shitty service and upsells.
If you are willing to pay just a few bucks more, there are a lot of good registrars who don't up-sell you. Joker.com is my favorite. I think it comes to another four dollars a year; less than half a dollar a month.
Have you considered what kind of resources and expertise that are required to handle issues such as domain name disputes? For example, suppose Alice and Bob run an informal business together, they have a clash and both of them make claims of the business' domain name. Or if Mallory registers someone elses company name and use it for nefarious purposes? [+]
[+] See http://swartz.typepad.com/texplorer/2006/04/wellknown_rock_.... for a particularly domain name anecdote involving Metallica and a Swedish VC firm.