In his discussion of the first chapter of the Laozi, Ziporyn (Ironies of Oneness and Difference) tells us that the meaning of "name" (and thus "namelessness") at the time of writing was not the same as that of later philosophical disputes about nomenclature (the "rectification of names"), but rather had, more simply, a primarily social reference; it had to do with fame, one's value to the community. He similarly (and as collaborative evidence) tells us that this is its principal meaning in the Inner Chapters of the Zhuangzi. (How this affects the premise of Chad Hansen that Zhuangzi's entire project was a continuance of this concern with the relationship of names to reality, I am unsure.)
Name (fame) had an intrinsically positive connotation in Chinese culture at that time; it spoke of the value and worth of someone to the larger community. One's worth was predicated on one's contributions to society. Though in our present popular culture full of hype, "fame" may connote a negative, superficial quality, and its pursuit an unworthy activity, it is still greatly valued as an endorsement of one's worth generally. To be recognized as contributing to society, making the world a better place, leaving one's mark — all these are expressions of how our self-worth is linked to our societal worth.
Ziporyn quotes the Wenzi (which he also identifies as "apocryphal" — i.e., not what it purports to be, the sayings of Laozi) in this regard: "The nameless is lowly and unesteemed. . . The wealthy have a name, so the named is honored and favored; the poor have no name, so the nameless is base and insulted. . . To have merit is to have a name. To have no merit is to be nameless. The named is produced from the nameless, so the nameless is the mother of the named."
Thus, when the opening verses of the Laozi tell us that Dao has no name it is telling us that it is valueless, worthless and unintelligible. It is not primarily a problem of its unknowability, but of its incoherence; we cannot incorporate it into an intelligible coherence and this renders it useless. (Here we begin to see another way into Zhuangzi's "usefulness of the useless" and of his advocacy of non-dependency on societal opinion.) This awareness of the valuelessness and unintelligibility of Dao, of the "unhewn" chaos from which all things emerge, throws an immense wrench into the gears of our normal cultural and psychological coherences. It pulls the rug out from under all that we esteem and hold dear.
Yet still we seek coherence, and philosophical Daoism does not deny us that attempt; only it suggests we incorporate the fundamental incoherence of reality into our coherence. Yet, because the incoherent is privileged as that from which all things emerge, our new coherence is also and primarily an incoherence. We become “unfixed”, unmoored, from any and all static value, purpose or meaning. Thus, the sage has no merit, no name, no fixed identity. And thus do we wander.
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