BTC has had this from the start... google it...
Yes, it has, but to a much lesser extent (less characters). Also, try building something like this on top of their blockchain without getting the smackdown :-P
Quite right about characters... but they could not stop you from inserting these into blocks via the same method you are using... all that changed here is the actual tag is added whereas putting into BTC would require the parsing site to use some sort of identifier at the start or end of the text to flag it so you got only confessions.
Regardless... the functionality has been here... CFN just took it to the next level and made it a real feature worth using. Technically... no one would have to use the site to create a confession... if they knew how to craft the entire transaction and submit it raw they could add it on their own and your site would parse it for only 1 satoshi + fee.
About the last part, that's partially true, however, the site does not display ALL confessions stored in the blockchain -- only those entered through the site. In theory, you could create your own site that used the same blockchain with a completely different set of confessions. Or a unique site that simply shows all as you said. The original implementation did it like that, but we restricted to those entered through our site specifically to avoid allowing some people to skip the penance while getting the same confession posted to our site as a normal person using the system as intended. It also aims to avoid noise/spam, since paying the penance is an incentive to not post noise/spam.