.localhost is already reserved for the loopback, per RFC 2606, but I agree with you in general. A small network shouldn’t have to have a $10-15/year fee to be compliant if they don’t want to use a domain outside their network.
As other posters have mentioned, .lan .home .corp and such are so widely used that ICANN can’t even sell them without causing a technical nightmare.
NixOS gang, you here?
No? Guess I’m here alone. Meme checks out.