Maybe they want to avoid the ambiguity between john.doe.name versus john-doe.name, and I assume they prefer the latter scheme because it probably sells better. Nevertheless, discontinuing existing domains is disgraceful.
It's exceedingly charitable of you to try to infer a good reason for what they're proposing. I say "exceedingly" because in their proposal they had the opportunity to present a good reason, and they chose not to use that opportunity.
Was it even possible to register just a second level .name domain name? It sounds like it wasn't, so therefore no one would be using john-doe.name and there'd be no ambiguity.
Even that doesn't pass basic scrutiny. The same ambiguity can and always will exist with tim-apple.com and tim.apple.com - there's nothing here that needs fixing.