The problem is that you'll still need some kind of unique "domain space", i.e. you can't have just <ip>.vendor.direct (or whatever the TLD would be), because th

The problem is that you'll still need some kind of unique "domain space", i.e. you can't have just <ip>.vendor.direct (or whatever the TLD would be), because then multiple users could get a signed certificate for the same FQDN, which would allow interesting MitM scenarios (that was one of the main motivations behind the decision to forbid CAs from issuing certificates for internal names). Anyway, I think that the public DNS solution + DHCP hostname mapping + manual DNS configuration as a last resort would be good enough for almost every scenario I can think of.