It uses DNS for only discovering the other containers within the same custom network, if query is not found the DNS redirects the queries to your own DNS server, I don't see how it can be worse than /etc/hosts solution.
Exactly, obviously /etc/hosts will still take precedence, but instead of munging your /etc/hosts when starting a container you can just use their DNS server. I don't see a problem with this.
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It uses DNS for only discovering the other containers within the same custom network, if query is not found the DNS redirects the queries to your own DNS server, I don't see how it can be worse than /etc/hosts solution.
Exactly, obviously /etc/hosts will still take precedence, but instead of munging your /etc/hosts when starting a container you can just use their DNS server. I don't see a problem with this.