Like DNS, it resolves resource records for domains that has ed25519 public keys as Top Level Domains.
So yes you got it right. whatever you can do with DNS, you can do with a public key, except you own that key and you don't have to rent it from someone, which makes onboarding hopefully much simpler.
I am a coauthor of something similar. The draft RFC was presented for consideration at IETF yesterday
https://datatracker.ietf.org/doc/draft-carter-high-assurance-dids-with-dns/
There is a DID that uses/inspired by Pkarr called did:dht.
I personally don't care for DIDs, I want public keys to be TLDs not a second class citizens with weird URIs that are not meant to be used in HTTP(s).
But, happy that people are trying different things.
Yeah, I agree with. We are just trying to bridge an established system into a new world.