I agree retailers provide a service and add value. The statement about retailers was to counter the statement that "buying something just so you can turn around and sell it to someone else for more money, without having made any improvements is just jackassery." Using retailers was a bad comparison.
How about investing in gold. I buy an ounce of gold hold it until the value increases and sell it. I don't think that is wrong. I didn't provide a service or improve the gold in any way. I just waited for it to appreciate in value, nothing wrong with that.
The thing I don't like about the squatters is that they are not "buying" an item to resell, they are paying a nominal fee to register an item that, in essence, is unowned solely to deprive others from the opportunity to use the item, and later try to sell it for a profit.
I guess my main point was that it is not wrong to buy and sell for profit regardless of whether or not you add value to the item, but the squatters are not "buying" items they are in essence obstructing access to what should be an available pool of items so they can sell them.
The only solution I can think of, and it probably has a huge flaw that would make it unworkable, is names are not transferable. I can register an unused name and if I don't want it at the end of the term it will revert to an available status, but I cannot transfer or give it to anyone. Once it reverts to available it is fair game first come first serve. If I were sitting on a name that you wanted I could say pay me and i will not renew, but you would not likely pay much as you may not get the name even if I don't renew it, someone else might jump in and grab it. I think that then there would be little incentive to scoop up an assload of available domain names just to block users from getting them.