Well, every registry that I know of "reserves" names to some extent. For example, the .ca registry holds back all city names, in addition to a series of "protected" keywords.
I don't consider doing it for a commercial purpose to be any different. Verisign is holding back all one-letter .com's and will auction them off when the time is right. Dropping two-letter .com's will not be made publicly available and will be held by the registry (though nobody is dropping any LL.com's anytime soon). And even last year, all the one-letter .biz domains were sold off (with the exceptions of i.biz and e.biz).
I do think it was somewhat unfair that Frank Schilling got an early crack at it. He missed several of the best keywords, IMO, to include lesbian.
When I was on DNCruise, I met someone from .xxx, and he showed me a list of premium .xxx domains that the registry was selling off. Most of it was overpriced, IMO. I can't comment on any particular names or quote particular prices, but you can't expect to come away with any keyword even close to good for less than $xx,xxx.
There's only one .xxx name that I actually want, and it is one that I think will be headline worthy, as an application which would compete with mine has already made mainstream news.
Otherwise, I would consider this TLD to be one of the better new ones to come out, especially given the security features with the built-in McAffee protection.