I find that the ccTLD for my country strikes a pretty good balance.

It’s still cheap to register and renew, but requires a traceable real connection to a company or a person:

> 5. Requirements for the applicant - who can apply?

> Organisations

> 5.1 The applicant must be an organisation that is registered in the Norwegian Central Coordinating Register for Legal Entities, see the list of which types of organisations can apply (Appendix E). The organisation must in fact conduct business and/or have activities and a presence according to information specified in the Central Coordinating Register, and it must document its actual existence if Norid requests such documentation. The organisation must have a Norwegian postal address.

> 5.2 Each organisation may at any time subscribe to up to 100 domain names directly under .no. In addition, an organisation may subscribe to up to 5 domain names under each geographic domain to which the organisation belongs, as well as 5 domain names under each category domain to which the organisation belongs.

> Private individuals

> 5.3 The applicant must be over age 18, registered in the Norwegian National Population Register with a Norwegian national identity number and have a Norwegian postal address.

> 5.4 Each private individual may at any time subscribe to up to 5 domain names directly under .no. In addition, a private individual may subscribe to up to 5 domain names under each geographic domain to which the person in question belongs, as well as 5 domain names under priv.no.

https://www.norid.no/en/om-domenenavn/regelverk-for-no/#5.-R...

It works well, and on top of that it is still possible for someone to host content on behalf of someone else to protect the anonymity of that other person, for example by as you said handing out free subdomains to others and handling complaints about scams and other undesirable or illegal things. With all the responsibility and legal liability that doing so incurs.