The claimed benefits were:
Nominet to check registrant details properly - an admission that their previous practise was rather casual.
Websites to be scanned for malware on a regular basis - at what additional cost? UK registrar 123reg offer a service "Site Scanner", 5 pages for £3.50 a month (or you can use Google webmaster tools and get free site-wide malware scans).
Registrants to be entitled to use a "Nominet approved" quality mark - along with all the other "approved" badges and labels that appear all over the web - and are universally disregarded
The shorter name is "more convenient" - delivering the fantastic benefit of 3 fewer keystrokes... but certainly more confusing, everyone is familiar with .co.uk
"The new names make it easier to choose a suitable domain name" because more become available - not true. If someone owns great-example.co.uk and someone else registers great-example.uk it only leads to confusion and they could be guilty of "passing off". Just try buying a name like tesco.cx (one of the few not already owned by Tesco, .cx is Christmas Island), I can confidently predict you'd be hearing from their lawyers not long afterwards even if you made no use of the name. SMEs simply can't afford the cost of registration under all top level domains never mind the legal fees to defend them.
Trade mark holders will be given priority - so if I've been legitimately using great-example.co.uk for ten years but a third party has great-example as a trade mark, they'll get priority for the great-example.uk name over me.
Having demonstrated that the claimed "benefits" are illusory at best, let's consider the disadvantages:
The annual fee is substantially higher, the wholsale price was to be "under £20 p.a." (compared with a the current .co.uk wholesale price of £5 for 2 years). Registrars can charge whatever they want as the retail price. In short, registrants can expect to pay a much larger annual fee.
Presumably there will be an additional charge for malware scanning and for DNSSEC.
As mentioned above the owner of great-example.co.uk name might find that a third party has registered great-example as a trade mark and will get priority for the great-example.uk name. The implication could be a great revenue earner for the legal profession. Alternatively it could go to the Nominet dispute resolution process (£££). A trade mark is not unique, more than one organisation can have a trade mark on a word as long as there is no risk of confusion, i.e. they are operating in different business sectors. Apple was example being the trade mark of the Beatles shop and of a computer company. For many years both had rights to use "Apple" as a trademark as long as the computer company didn't enter the music business and the Beatles didn't start selling computers. (Subsequently the computer company paid the Beatles to drop their trade mark).
There will be a "sunrise period" - presumably this will follow precedent of charging a substantial premium for sunrise registrations. (With the possibility of fraud as alleged by some sunrise applicants for EU domains). And if you don't "defend" your existing name with a sunrise application but someone else buys it (then or at cheaper landrush stage), you're stufffed.
Who benefits? Nominet is a "limited by guarantee" company, however that doesn't mean that employees can't benefit from generous remuneration packages, the average staff salary in 2011 was around £60k. The total financial benefit package for the highest paid director was over £250k.
Domain name registrars are Nominet members, paying an annual fee and a small fee for each domain name. They stand to do very well out of the new arrangement.
Those with deep pockets - SMEs on tight budgets just have to cave-in when they see the likely legal cost of a passing-off dispute
The corruption starts here: It's interesting that Nominet didn't use their mailing list of 10M domain name registrants to publicise the consultation - but doubtless all the registrars were contacted. No point in asking the turkeys to vote for Christmas, let's just get Bernard Matthews opinion.
If Nominet were serious about he alleged benefits then they could offer all but the shorter name acknowledged by a "Nominet approved sticker" as an add-on for .co.uk names with the associated DNSSEC, security scanning and some kind of legitimacy check - like that busineses are registered at companies house, genuine address on file not an accommodation address, accounts up to date, no credit reference agencies alerts.