Its a good idea in theory but was never put to much practical use. Several years ago there was an update to Mozilla Firefox that broke compatibility with the Namecoin plugin that allowed people to host websites under ".bit" domains. Last I heard there is still another way to do it, but its not widely used.
IMO the reason why decentralized domains never really took off is because Tor already does a pretty good job of allowing for uncensorable websites. The URLs just aren't as memorable as "nutildah.bit" or something.
With ENS, yes its great that you can just type "nutildah.eth" in an explorer or in Metamask and it will instantly convert to the ENS owner's ETH address. But AFAIK they aren't actually being used as website domains.
Good-old Namecoin is not a popular as it used to be in the early days. I doubt Mozilla is going to patch things up with the next release of Firefox browser, just to make .bit domains work. I've been using extensions like Dotbit.me and Peername on both Firefox and Chrome browsers to resolve .bit domains. I wonder if they still work with the new update?
Anyways, the idea of decentralized domains is great. But without mainstream adoption, centralized domains would continue to dominate the Internet for long. I've always dreamed of truly-decentralized websites using decentralized domains, built on top of a decentralized network (SAFE Network, ZeroNet, IPFS, etc) with decentralized smart contracts (Web3). It would truly make them censorship-resistant. As much as I like Tor, I've read online articles which claim it is compromised. Some say that Tor exit nodes can expose your identity (IP), leaving you vulnerable against government surveillance. So hosting a site on Tor with a .onion domain wouldn't be recommended. I2P is another option. Ever heard of eepsites? They're sites built on the I2P network using the .i2p domain. I've found this article online to anyone's interest:
https://mhatta.medium.com/how-to-set-up-untraceable-websites-eepsites-on-i2p-1fe26069271dWho knows if someone decides to build a decentralized marketplace or exchange on top of a decentralized network infrastructure in the future?