Bob Parsons, founder of GoDaddy raises some interesting points in his blog post at www.bobparsons.com .

Interestingly enough, both the schemes he complained about regarding the EU and in this case most were most probably caused by Americans.

So, of the 764,672 names registered on March 31st, 703,503 — or 92% — were dropped just before the grace period expired. The lion’s share – perhaps 99% — were dropped by registrars participating in the add/drop scheme.

Now, that is quite a lot of domain names. As mentioned in the blog post the problem increased quite a lot just between the year 2005 and 2006.

From March 2005 to March 2006 the scheme increased FIFTEEN FOLD!
During the month of March 2005 a total of 3,243,967 .COM names were registered. Of these, 1,851,778 were dropped during the grace period – most were part of the add/drop scheme.

The scheme exploded in just a single year.
Things changed drastically in just one year. During March 2006, a whopping 29,894,290 .COM names were registered. Of these, 92.5% or 27,660,668 were dropped just a moment before the grace period expired – again more than 99% were part of the add/drop scheme.

If you are interested in domain names, or just generally want to read more about how systems are being exploited, I recommend this blog post.