How do so many startups register domain names similar to existing businesses?

Just as one can't believe everything s/he reads, one can't presume that others' business decision-making is legally prudent. While using another company's name may not necessarily cause a problem (e.g., where the use is for something so unrelated as to preclude a likelihood of confusion), some brand names are sufficiently strong (i.e., famous) such that technically unrelated uses may still cause a problem. To your example, a common practice among domain squatters is to register a company's name on obscure TLDs in the hope that said company will in the future be motivated to pay the squatter for those rights. Domain name squatting isn't necessarily a problem (absent facts underlying a 15 U.S.C. s 1125(d) action), though appending a .___ to another's trademark will itself not likely save you from a likelihood of confusion problem. This is all merely academic in the absence of specific facts, and if you are seeking actionable guidance you should speak with a trademark attorney in private.