First, domains are one of the original "digital assets" and have been established to be extremely valuable. Domains are one of the only naturally scarce digital assets! Artificial scarcity can be made to work (see Cryptokitties) but is at the end of the day a social construct. The namespace is finite, and the desirable namespace is a small fraction of that already finite namespace, so domains have a true scarcity that drives value.

Second, domains are uniquely suited for decentralization because they are a frequent target of seizure - for example, the US Government seized the domain names of many online poker sites, a form of censorship far more insidious even than the Chinese great firewall, since it blocks everyone's access. Handshake names are on-chain so cannot be seized.

Third, extremely high value domains, even ones which are not at high risk of government seizure, can be compromised very easily by social engineering attacks on registrars. This happened to several ICO websites causing the loss of tens of millions of crypto. A domain on Handshake can be stored as a private key, and private keys can be stored extraordinarily securely if one wishes, for example via cold storage of shamir-secret-split keys.