I'm not really well informed about the politics of DNS at the top, but I've always had the impression ICANN has been grossly negligent / corrupted over the last twenty years. At the end of the day there is profound capital interest in making name records unfair and noncompetitive in order to rent seek fortunes off the Internet and I see no indication ICANN is anything but compromised by those interests in the way the…
Charge US$0.50 per month ($6 per year) for every domain reservation regardless of who is reserving. The fee must be charged per month and not per year, which intentionally results in greater maintenance overhead.
I don't care if you are a registrar, government, charity, school, or whatever. US$0.50 each and every month for each and every name. Registrars can slap whatever markup they want on top of that. The free market will lower the price where competition matters and raise the price where demand is huge for a specified name.
If you are holding 100,000 domain names and doing nothing but serving ads on them you better hope you are generating greater than $800,000 (conservative estimate) in advertising revenue off those domains. That number is the cost of reserving the name plus your business expenses to maintain those names and the associated advertising content. I find this scenario to not likely to be profitable.
Unfortunately this solution won't work in reality, because everybody will bitch about their business interests and self-justifying political reasons.