> we'll just use /etc/hosts no DNS required!
this is classic "easy vs. simple" folly, witness how someone too lazy to [learn how to] setup proper DNS for their infrastructure will do 10x the work hacking something "easy"
Set up. You set up your setup.
Serious response: how is templating out /etc/hosts with Ansible not 10x simpler than setting up an additional service that only introduces additional risk?