That seems like a pretty reasonable way to write a small cross-platform application which is intended to be a background service to begin with. You only have to create the UI once without needing to link in a heavy cross-platform UI framework and can then just put an HTTP shortcut to the local name in the start menu or equivalent. Normies can easily figure that out specifically because you're not telling them to read documentation to manually edit their hosts file.

There are also other reasons to do it, like if you want a device on the local network to be accessible via HTTPS. Getting the certificate these days is pretty easy (have the device generate a random hostname for itself and get a real certificate by having the developer's servers do a DNS challenge for that hostname under one of the developer's public domain names), but now you need the local client device to resolve the name to the LAN IP address even if the local DNS refuses to resolve to those addresses or you don't want the LAN IP leaked into the public DNS.

Or the app being installed is some kind of VPN that only provides access to a fixed set of devices and then you want some names to resolve to those VPN addresses, which the app can update if you change the VPN configuration.