This scheme has the advantage of it not mattering if something is active. Instead you pay fees based on what it's worth to you.

If someone is squatting on a high-value domain, they will have to pay high fees or sell the domain to someone who can make better use of it.

This prevents someone else from squatting on google-search.com and allows it to go to the highest value use -- protecting Google's brand.

So, I'm an average person hosting my email on my domain. I use it for both personal and professional reasons. I'm by no means wealthy, so even though my email address has huge value to me (from clients, to friends, to banks and digital services) I can't pay a huge price for it.

With your suggestion, someone with enough money would be able to force me to sell it. Identity thieves would have a field day with this!