You could do it with top-level domain names alone, but that would require users to buy domain names and retain control over them forever. It means you have to trust your domain registrar and pay them fees. This is too big a burden for new Bluesky users.

You could do it more cheaply with subdomains, but then you have to trust the owner of the parent domain.

So instead, they created a new registry and a way for users to cryptographically sign their registry documents. Since this is all done behind the scenes, most users are still fully trusting the central Bluesky infrastructure. But in theory, they could migrate off of it.