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I don't like to quote Bob Parsons, but his essay describing the problem is second to none http://www.bobparsons.com/DomainKiting.html

It's called domain kiting/parking/squatting, and could be easily stopped if the ICANN introduced a non refundable deposit on a domain name.

The key point from the article is this,

- As it stands, domain names are fully refundable within 4 days. This causes million dollar corporations to buy domains in bulk, renew them every four days, and eventually buy domains that they think are profitable. In the mean time the average web-preneur sees no domains available.



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