As binarymax mentioned[1], it's very useful when you want to test on multiple devices where editing the host file would be undesired or not possible. This includes mobile devices or computers that are not your own or that you don't have administrative access to. It's also easier to just share a link instead of asking people to change their hosts file just to test a part of a site.

[1] https://news.ycombinator.com/item?id=7732756