* Domains + sub-domains allows for wildcard SSL cert registrations (e.g. a cert that covers .example.com).
There's also cookie registration.
* How do I differentiate between my_blog_host, my_blog_host_2 and really.my_blog_host? Are they all owned by the same person? Is really.my_blog_host associated with my_blog_host?
I think it's a fair question. Maybe at one point there was a need to have different namespaces, but what need there is now for it, hard to say.