I don't know ... it serves a different purpose.

One scenario:
There a lot of problems and the DNS server (appliance) is down....
because it's running on Windows ;-)
but you've some really important - clusters or servers, a lot of
settings not using IP addresses but DNS names (as it should be...)

If you then have host entries cached by sssd, you still *can* resolve
the hosts...
without having to distribute /etc/hosts files with a configuration mgmt system.

-- PieterB
You can have multiple redundant dns servers and /etc/resolv.conf can (and is by default) be managed by the dhcp client.
NIS hosts table is obsoleted as well as the whole NIS concept.
Moreover DNS is a well defined standard. Just compare it with Windows and NetBIOS, same thing, they got rid of it in favour of DNS.

Ondrej