- Internationalization conflicts between IRI and the new (non-ASCII) domain names. As far as I can tell, the conflicting methods of encoding and display haven't been resolved. This seems like a major disaster.
- Distributed responsibility means more changes for messing up: the more registrars and domains and domain policies, the more likely it is that someone will allow spoofing domain names to be registered.
- Trademark issues: the assurance that the concerns of trademark holders about squatting, monitoring, and having to spend much more to protect trademarks -- well, the assurances aren't particularly convincing.
Anyway, I'm not convinced. Domain names are an area where stability is more important than "first principle answers". Yes, there's no particularly good reason why you can't have something.coke instead of something.coke.com, but for better or worse, don't change it unless there's a better reason for changing it than "why not?".