Their heart is in the right place, because Verisign’s monopoly on “.com” — which has become the de facto only space where everybody wants a domain name, if they can get it — was a terrible mistake that needs to be corrected. We need to do something about this, but the plan of letting other companies get generic TLDs which are ordinary English words, with domains like “.sport” and “.music” (as well as .ibm and .microsoft) is a great mistake.
There is one option Brad doesn't mention: do away with TLDs. This would have two advantages. First, it would remove needless drag from the current system. Everyone agrees that TLDs are nearly useless and that practically everyone goes for .com anyway. Web browsers even add a .com for you automatically if you leave it off. Why bother adding it at all? Second, it would remove security problems that happen due to confusion about a top-level domain, e.g. mixing up Amazon.fr and Amazon.rf.
More ambitiously, it would be nice to move away from registering English-language words at all. Instead, use IP addresses as the globally unique address. To get English-language names for web sites, use something that is not globally unique, such as pet names. I wish I could point to a concrete implementation of such a system to rely on, but I believe a good system could be designed.
If such a system sounds weird, ponder for a moment just how much you trust DNS names, anyway. If you want to go to Bank of America's web site, which is more reliable. You typing out bankofamerica.com letter-for-letter perfectly, or doing a web search on "Bank of America" and using the top hit? As this example shows, DNS as it stands is not a particularly good solution for naming sites using English-language words. It's merely a tolerable system that sort of works, that has become a de facto standard at this point.
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