It would improve things for everybody but the certificate authorities.
They're selling something with a marginal cost of zero for $50 each. A wildcard certificate costs more not because it is materially different or "harder" to issue, but because it replaces many $50 certificates. Thus, it "must" cost more, or everybody would just use wildcard certificates everywhere and reduce profits at the large public CAs.
It is actually possible to get a domain-specific CA like the one you're thinking of. I saw one at a large department of education. It allowed unlimited issuance of certificates such as HTTPS, mail-signing, document-signing, and some other types that could be locked to a DNS domain. However, there was still a cost per certificate and the up-front cost was huge, something like $100K.
I made a comment up-thread, but name-constrained CAs can issue for anything. It's enforced client-side, and not supported in far, far too many places to work. You'd be giving everyone the ability to issue for anything.
Not to mention that running any kind of public CA is harder to do properly than most people thing.
I get the negativity towards public CAs, but much of what you said isn't quite right, either.
The only "safe" way to introduce these would be to make a certificate format that's intentionally incompatible with existing implementations; that way only new implementations (which are aware of the domain constraint) will accept it where as old implementations would just reject the certificate as invalid/corrupt.
They're selling something with a marginal cost of zero for $50 each. A wildcard certificate costs more not because it is materially different or "harder" to issue, but because it replaces many $50 certificates. Thus, it "must" cost more, or everybody would just use wildcard certificates everywhere and reduce profits at the large public CAs.
It is actually possible to get a domain-specific CA like the one you're thinking of. I saw one at a large department of education. It allowed unlimited issuance of certificates such as HTTPS, mail-signing, document-signing, and some other types that could be locked to a DNS domain. However, there was still a cost per certificate and the up-front cost was huge, something like $100K.