Therefore any company which creates a broader hierarchy is not motivated
by what's best for Internet users, who are best served by a simple
hierarchy (IBM is IBM is IBM no matter what you append to it).

Okay. You picked an example which proves your point. However, there's
plenty of exceptions. Who should have "apple" in this flat namespace?
Apple Computers? Apple Records? Apple Fruitstore?

While the BBC (British Broadcasting Corporation) is a fairly well-known
name worldwide, what gives us more claim to "bbc" in the flat namespace
than "Big Blue and Cousins" or "Baptist Bible College" ( and respectively)? Have we now got because we had a greater
claim to it, or because we had the better lawyers?