.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.
We just got vertical align last month. There’s so many things they should be working on but are too busy trying to add more ads or monetization features.
I think the web is just too long in the tooth at this point but there’s nothing we can do.