.com.au's used to be $140 and still just about everyone used them. I'm guessing you are joking with the comment above.
Course I'm not joking. And your statement above is not true.
10 years ago com was way more dominant than it is now. .AU has made huge inroads in terms of marketshare and that's largely due to falling costs.
Once these gTLD's are launched no doubt registries will be offering $1 domain names under .shop or .web etc and the danger is businesses will be tempted to go that way.
one, I take all your points but I really do believe it would lead to an exodus - people will always choose the cheapest option unless they can see the difference in value and many people just can't.
With a block of land, if the one you want is taken, then you simply move onto the next one in the street. If they are all taken you move onto the next street, and if they are all taken you move onto the next suburb / development.
That applies exactly the same way with domains but instead of compromising slightly each time you move away from your preferred position, you're compromising slightly on the domain.
Premium Domain = Waterfont Block
Crap Domain = Out in the Sticks
Just as with land prices people are happy to do that. They say 'I don't need to be in the high street' just like a business owner says 'I don't need the best possible domain'
Perhaps current domain registration pricing is undervalued?
I have no doubt it is but that's just my opinion, your opinion and most people who understand domains opinion. The market seems to say otherwise...