You make a good point about the need to separate identity from publishing (for example).
I’m not sure that needs to define the UX.
I too am thinking of the simple human, and I think it is logical to start with something they understand - the process of signing up to most services today starts with creating an identity for the service. Facebook name, twitter friendly name + handle, github name etc. Even creating a login is almost always ‘username’ plus pwd.
What I’m suggesting is we follow that familiar workflow as closely as possible for the default on-boarding. This doesn’t change the underlying capabilities, so you can still create an account, and use an app that knows how to create a wallet, website etc, without going via a SAFE Name (identity based on WebID).
For apps which function in that way we can still use your naming for domain / subdomain, so the two approaches are compatible. It’s more a matter of how simple and intuitive we can make the default UX workflow.
So maybe we could start with something familiar and conventional, but with more advanced capabilities, concepts and terminology hidden until necessary.