"If anything, they should have designed it such that it follows an IP style system where you get more precise/specific with each period..."

I think it is interesting that you say that, because I see this system as DNS system on top of IP.

So latlong is your IP, and W3W is your human-readable domain name.

Which begs the question: would a better system involve letting people pay to register names that point to latlongs? There is a free tier that are an open-source list of names for the entire globe, but companies could pay to have names like "free.tacos.here" point to their locations.