Ethical or not?
I hope DNS is not too controversial a topic. It receives some strange media coverage and is not well understood by many people in my experience.
My view is this: I see DNS, remote translation of names to numbers, as "unnecessary" for most end users of internets (cf. intranets). I believe the Hosts or /etc/hosts file or a cached DNS server are 1. enough to meet such users' needs (i.e. to list all unique sites a user will visit in a lifetime), 2. small enough to be manageable with today's technology (e.g. the entire .com namespace could be addressed in a file under 150mb) and 3. simple enough for users to understand (e.g. analogous to an address book; cf. the concept of a distributed database). Moreover, I believe users are quite capable of remembering 10-digit numbers, as they routinely do with telephone numbers, usually by maintaining a personal address book. But I think users are never given the chance to evaluate these options, because 1. they are unaware of them, and 2. the usual sorts of "FUD campaigns", for lack of a better term.