I have mixed emotions about this post. It's both really frustrating & reassuring for me at the same time. I've been working (with a partner) on a very similar concept for the past couple of months.
Though I'd say that the features of ours are far more developed (we're implementing most of the ones I've seen suggested in this post); you're first to market. I guess the list of MVP features we've been working towards was just a little too long. Lesson learnt.
Sigh! I'll just have to get that signup page finished a little bit quicker.
I'm not sure it's as evil as you make it out to be. It's certainly not clear-cut domain-squatting.
They're adding value to a domain & selling it at (what I believe to be) a reasonable price. They're clearly investing time coming up with ideas for domains that they can create decent logos for. You would easily pay $500+ for a 'good' logo.
I've just had a quick look at your demo video. 2 minor things struck me.
1) It's really blurry. Can I suggest you either re-encode it at a higher resolution, or perhaps record it on a smaller screen resolution (that way you can keep the file-size down, but can keep the bit-rate higher).
2) The timeline has no markers. It might be nice to add some little indicators to give the user a visual indication of where the versions lie on it.
Ace work on the site!