I aggree with your point #1, if you search for an specific term / domain it should always appear first if there's a direct match.

but for #2 there's a pro-competition argument here. If you search for Expedia and all you ever get is Expedia and expedia pages underneath that, in theory that's good. But what if you don't know about other online travel sites? You'll never see them, so it kind of makes sense that you are shown other sites in there.

Google should recognise that a search for Expedia is either: a) For Expedia b) For a travel holiday

and let other competitors rank for b), showing Expedia as the biggest and main CTA on the page.