'...But demanding that German domain name servers refuse to resolve the US address www.gmail.com to an IP strikes me as unfair restriction on trade.'

No it isn't! Why should Google be able to use this guy's registered trademark in any form?

If I registered the domain hersheys.co.uk, do you think an American court would agree that I could have customers use it in the US or do you think they would want me to relinquish all domain names with someone else's trademark or tradename?