One problem with this convention is the simplicity of the domain name. You and I understand how DNS works and that it's just a representation of words, but to most people it works more on the principal of logical naming and their mental association with the words it forms.
I.E. We may see sales.example.com/wiki
and think of it as a very logical place to put a Wiki site for colaboration for the sales department of our organization. However, your average person who is of the intelligence level of sales is going to see asdfgqwerty.example.com/zxcvbnm
and think where do we keep the sales notes. If you set it up at http://notes.sales/
they may actually have a chance to remember that. I know bookmarks may help, but when dealing with users you need to assume people who are so dumb that they can choke on pretzels even if you tell them to chew them completely before swallowing.
This gets even worse with organizations that have domains like wehaveadumbbusinessname.com that can be organized into regions or units and before you know it you have people asking where is the mail web server and the reply is mail.salesandmarkenting.southeastern.wehaveadumbusinessname.com/outlookwebclient sales.mail is going to make your customers (employees) a whole happier and reduce tickets considerably.
In the same way that ICANN has refused to grant sex.edu they should refuse a lot of gTLDs like
.intranet (from above, I like
.here too). They don't work in the same way that
.catholic do. it's clear that these tlds are in use in countless large deployments around the world and we should get a reserved list of words that will never be publicly addressable just like we got ip blocks. This can't be that hard to understand.