I would disagree. This may look like a replacement from the end-user's point of view, but it does not address the real issues of DNS management: space to store all zone data, bandwidth to support requests flow, resources to handle the load.
Either you are just proxying someone else's service, or you are running your own on (supposedly) limited resources. Am I wrong?
Moreover, I heard from DynDNS engineers that the main reason that led them to stop their free hostname offer was: it was abused for spamming too often. How do you intend to cope with that?