First, that a legit dealer could/did(does?) sell third-level domains at all (Verisign, no less) Second, that the top-level is staying available, allowing for second-levels to be bought/sniped like you mention.

If you do lawyer up and need help with legal fees, I think this would be a worthy cause.

Should I rush to reserve y.name so my email address and personal website can stay online?

Overall this seems like the right move, either they all are trusted or none.