One thing that will always be needed is pubkey.nostr as a domain.  Because only one privkey controls, or can control, that record then getting a DNS doesnt matter too much where you get it from.  Pubky are making proper eco system for this including 10 million Mainline nodes, so it truly is censorship resistant, rather than the small nostr public relay network.  See also

https://dnstr.org/

Main problem is that it's hard to get anything at all through nostr right now.  So it's a dead end for most innovation.  Attaching names to a pubkey is a two step process because more than one one pubky can claim a short name, you need a tie-breaker.  But it's no good some small tie-breaker system that no one has heard of.  For it to be fair it has to be well publicized and a level playing field, with some cost to getting names.  Running a node and an indexer is one step (tho no one has done that right now) plus getting a good domain, then you have to publicize it, and then you need to ensure the rules are fair and stable.  It becomes such a huge task, and with people against it, very little chance of success.

As other solutions have emerged from other eco systems, it seems the path of least resistance to use them rather than to do it all yourself in an adversarial env.