alt Hacker NewsDomain squatting is when you buy a domain purely for speculation with no intent of using it.
This person has built something using the domain. They are not squatting it.
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Agreed. The main problem with domain squatting and sniping is scammers either trying to impersonate another organization, or extort trademark owners into paying insane amount of money to obtain a domain which has no legitimate use to the current holder. Neither are happening here. Friendster intentionally let the domain and trademark go, and there isn't any entity that holds a legitimate claim to that name anymore.
I don't think that old business names should be "retired" and forever banned from use. After a certain amount of time the name should be free for someone to use again, and 10 years of non-use seems reasonable to me. The main concern with reuse is confusing consumers into thinking they are dealing with the old friendster, but I think consumers are savvy enough to realize that an old trademark rising from the dead often has nothing to do with the original, regardless of whether the current trademark holders purchased rights from the original, or claimed abandoned ones, as in this case.
His other business dealings aside, I don't have a problem with how he obtained/revived the friendster domain and trademark.
He founded a domain brokerage for squatters and seems to be squatting on other domains for ad revenue (read the section about the trade he made).