It definitely makes sense for stuff like (non-US) gov domains. Have a federal agency control the `gov.<ccTLD>` domain and hand out subdomains to other agencies. See https://dachmarke.gov.de/ for example.

But I agree it makes no sense for public sales to the wider world such as `co.uk`. At least have the registrar be the govt company register and hand out subdomains to each registered company.