As a host myself, I can attest to the fact that domain loss is far more frequently an issue with either the customer (not paying the bills) or the domain registrar.
The domain registrars in many cases make more money if they're not diligent about reminding you to submit your annual renewal, etc. It's sickening. A domain registration might cost ~$20 (or less) per year, but most registrars have side businesses where they auction off domains that haven't been renewed to new registrants. Thus they stand to make a lot more $$ if you don't renew than if you do. I think the process is something like this:
30 days before it expires:
- they email you. maybe you get it, maybe your spam software gets it.
it expires:
- they email you. if you didn't get the first one, you're not going to get the second.
30 days after it expires:
- they change it from pointing at your host to pointing at their servers (cha-ching, advertising $$ with what was your audience)
- at this point you can usually get it back by paying some kind of "recovery" fee. (cha-ching: $50 - $150)
60 days after it expires:
- they check their subsidiary "domain auction" site's database to see if anyone's put in an auction bid to try to snag it. (cha-ching: $$hundreds - $$thousands)
- they check their subsidiary "domain watch service" database to see if anyone's paid them to watch for that domain expiring. (cha-ching: $$someone paid a subscription + now they get a renewal fee.)
- if there are no matches on either of the above, they'll look at the traffic the domain has actually been receiving since they took it over. if it's significant, it becomes a permanent advertising destination, operated by yet another subsidiary. (cha-ching, $$ indefinite ad revenue as people try to find your old content)
- if the domain can't make $3/year in advertising (enough for them to cover the registration to the organization managing the registry overall) then AND ONLY THEN will it go back into the pool of generally available domains for registration.
It used to be that even if you forgot to renew a domain, it'd go back into the pool in 30 days or so and you could just pick it back up. Now registrations are so cheap that the registration company makes almost nothing on the actual registration fees... instead they make way more on the side businesses.
Domain registrations need to go back to the old days of $100/yr ... or maybe $50/yr or so... something significant enough that people are going to think twice about snagging your domain just to put up ads.