We should really work toward reducing reliance on large service providers for things as much as possible. Remote DNS and other ideas sounded like a good idea at the time, but they are being used by firms for abusing data and privacy. Computing and networking has advanced to the point where a local hosts file is practical again, and we should really consider returning to basics where relevant.
Of course. Obviously, people were doing that in the old days because they had NO CHOICE. Technology back then made this the only viable option. Let's not forget, though, that the whole personal computer industry started while everyone thought it still held true; and quickly it was shown that small, personal computers could be useful for some small tasks, even back then!
As I said, these days, even the smallest "computer" (can even be a mobile phone) has enough processing power and storage to be able to do many things locally, and relying on remote servers actually rarely makes ANY sense: the devices use almost as much (or sometimes, actually a lot more) resources and power to give you access to any web site (and worse, web apps) through a web browser, than they do if you use the same kind of application strictly locally!!