Ok, I wouldn't attach anything of value to such a rigid contract system—money is far from the only pitfall here. There is simply no benefit to me over existing arbitration. At least with DNS I can contact my provider if someone steals my domains.
In terms of control the contract can as centralized or as decentralized as you code it to be, with the difference that it runs on a truly decentralized platform.
It does goes both ways as well, if you can contact your provider to get your stolen domains back, then your local dictator can also take them away from you because of something you said.
