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If domain names can be registered for under $10, why should domain name verification cost hundreds of dollars per year?
Oh, and the real answer is, "because they charge that much and people will pay it." Enter capitalism.
Your suggestion, in the first paragraph, is for how a "trusted" authority should establish trust with an untrusted endpoint - you do some activity to prove to that party that you "own" the domain, and that third party, which is a trusted authority by some other definition, is depended on for its verification of your site. Maybe that is enough to establish trust, but how does it relate to the post?
If you want to complain about the methods CAs use to verify identity, then that is a different discussion. If you feel a CA charges too much for its services, find a different one. The digicert price I found was after clicking 2 links in a google search. I bet you can find better prices without looking too hard.
Or you get behind someone like CACert.org, who gives out free (as in beer) certs and (I believe) is still trying to be accepted by mozilla as a trusted root CA:
https://bugzilla.mozilla.org/show_bug.cgi?id=21...
Mozilla has a nice, fair, and public policy for how to become a trusted CA:
http://www.mozilla.org/projects/security/certs/...
So I don't think there are major roadblocks preventing somebody from using your method to establish trust and charging less than $100 a year and getting accepted by mozilla as a root CA. Except, you know, capitalism.
What Firefox does, however, is demonising SSL w/o trusted certificate while it is still, by orders of magnitude, more secure than not encrypting at all. This is nonsense.