The approach they've taken ("trusted verifiers") is an approach aligned with their values, as it is an extension of the labelling concept that is already well established in the ecosystem. As an idealist, it is a shame that they gave up, I think they could have had an impact on shifting how non-technical people view domain names and understand digital identity... but as a pragmatist, this is the right choice. Bluesky has to pick their battles, and this isn't a hill to die on.
[1] https://handles.net [2] https://news.ycombinator.com/item?id=42749786
[1] https://news.ycombinator.com/user?id=coderholic
[2] https://news.ycombinator.com/item?id=43256298