This is not really an end-user issue but it is a serious usability issue for IT admins and developers. It's very very common to schlep around raw IPs constantly when messing with networks and I don't see that going away. It's also very important to be able to visually parse IPs when understanding the topology of a network, writing firewall rules or routes, etc.
This is a DX (developer experience) issue more than a UX (user experience) issue.
Edit: three specific problems with DNS:
(1) What happens when things are not configured yet?
(2) OSes are designed to have one DNS server but people belong to many networks either at once (local + VPN + virtual + ...) or serially via mobility. In reality you need many DNS servers, but then how do you deal with naming conflicts?
(3) DNS is dependent on IP so you can't use DNS to debug DNS issues. It's a circular dependency.
In practice IP schlep is very common.