…why would cookies ever need to work across domains? Authentication, shopping carts and all that good stuff can happen on the same domain. Third-party cookies, on the other hand, seem custom made for tracking and frankly, not much else.

Then there’s third-party JavaScript.
In retrospect, it seems unbelievable that third-party JavaScript is even possible. I mean, putting arbitrary code—that can then inject even more arbitrary code—onto your website? That seems like a security nightmare!
I imagine if JavaScript were being specced today, it would almost certainly be restricted to the same origin by default.

Jeremy Keith

Jeremy hits the nail on the head with third-party cookies and Javascript: if the Web were invented today, there’s no way that these potentially privacy and security-undermining features would be on by default, globally. I’m not sure that they’d be universally blocked at the browser level as Jeremy suggests, though: the Web has always been about empowering developers, acting as a playground for experimentation, and third-party stuff does provide benefits: sharing a login across multiple subdomains, for example (which in turn can exist as a security feature, if different authors get permission to add content to those subdomains).
Instead, then, I imagine that a Web re-invented today would treat third-party content a little like we treat CORS or we’re beginning to treat resource types specified by Content-Security-Policy and Feature-Policy headers. That is, website owners would need to “opt-in” to which third-party domains could be trusted to provide content, perhaps subdivided into scripts and cookies. This wouldn’t prohibit trackers, but it would make their use less of an assumed-default (develolpers would have to truly think about the implications of what they were enabling) and more transparent: it’d be very easy for a browser to list (and optionally block, sandbox, or anonymise) third-party trackers could potentially target them, on a given site, without having to first evaluate any scripts and their sources.
I was recently inspired by Dave Rupert to remove Google Analytics from this blog. For a while, there’ll have been no third-party scripts being delivered on this site at all, except through iframes (for video embedding etc., which is different anyway because there’s significantly less scope leak). Recently, I’ve been experimenting with Jetpack because I get it for free through my new employer, but I’m always looking for ways to improve how well my site “stands alone”: you can block all third-party resources and this site should still work just fine (I wonder if I can add a feature to my service worker to allow visitors to control exactly what third party content they’re exposed to?).