And replace it with what? If everyone has to fight over a global namespace we just wind up with a different sort of problem.
That interpretation might be overly colored by my personal view of things.
However much I might be inclined to agree that we have a global namespace now, I can't agree that ".com" is 'one of the biggest usability failures in history'. The point has been made before, but seeing "facebook.com" immediately signifies a website to people, using fewer characters than "find us on the web at facebook" ever really could. I found it very interesting to see mainland chinese advertisements with web addresses - for example, renren.com might appear in an ad as "人人网". The two 人 would be written in pinyin as "ren", and directly represent the name of the site; the 网 is pronounced "wang" and means net (here, the internet), but actually represents the unpronounceable suffix ".com". Thus I argue that ".com" is not even a clear loss in usability; it's providing context that people want.
b) I was gilding the lily a bit, that's fair,
c) I remain skeptical the benefits exceed the costs, (given the viability of sites that don't end in ".com", and the fact no one's raising "lack of context" as a counterpoint to expansion of TLDs), but you make a provocative point. I could see it as an open question.