OpenAlias does it just fine and is capable of fetching arbitrary data (including Bitcoin addresses) from DNSSEC records right now and has for years.
Electrum has supported it since version 2.0.
The centralisation and privacy issues are solved by using a network of DNSCrypt resolvers. Anyone with a VPS can fire up one of those. If configured correctly they don't log DNS requests.
To go a step further you can even use ODoH which proxies your DNS requests though multiple servers in an onion routing type design so the server resolving the name doesn't know your IP, and such a setup is by nature decentralised.
You can even go a step further and run all your DNS requests through a Tor hidden service. Not hypothetical, this already exists, Cloudflare does it.
There's plenty of ways that already exist to overcome the centralisation and privacy concerns of DNS resolution so dismissing the idea offhand seems premature.
