I think this could actually break a few things. For example, Netgear routers intercept DNS requests for routerlogin.net and return their own internal admin IP. It's a very useful feature, and it works no matter what DNS service you use.
That shouldn't work, and breaking it represents a useful feature. Use a sensible local DNS root, not a well-known one like .net. (Does some standard reserved namespace exist for the local network, instead of the various non-standard ones like .home or .lan? RFC2606 only reserves .invalid, .test, .example, and .localhost, none of which work for this purpose.)
