"just blows my mind that an organization ... can just ... do whatever it wants..."
Sell a public good to the highest bidder -- sounds like something that is bound to happen unless it is explicitly illegal. Turns out that the whole system is still run on "Trust", so we are good on that front! Those registering .org domains trusted the system, bad for them.
It also makes perfect sense that they package it as one giant sale. If they'd sell the Trust piecemeal, the law might catch up to them, or they might even loose the Trust before it is fully monetized! It's clearly essential that the Trust be sold in full and with upfront payment to maximize the profit.