That only works on a single server, so it's not an option for hdfs in anything but a toy configuration. The nodes in a hdfs cluster must be able to communicate

That only works on a single server, so it's not an option for hdfs in anything but a toy configuration. The nodes in a hdfs cluster must be able to communicate securely, and the way you do that is to set up TLS between the nodes, with Kerberos as authentication, which is quite bothersome to get running.