For instance, I own a .house domain that I use for a bunch of stuff that I've programmed. It would be a pain in the ass to go change that domain out. Now take that to next level and you're a business that's deployed a few thousand devices that need to call home.
I guess all this is to say - IoT doesn't just mean cheap botnet honeypot IP cameras. Take a look at https://www.balena.io/cloud for instance
Imagine he's set up some IoT devices at his parents' home, and those devices use services that he hosts somewhere on the internet. It would be silly to hard code the IP addresses in there, right (unless he operates his own ASN)? So he would use DNS to allow those devices to find his server(s). This would be the case whether the servers are at his home, at his office, or in a rack at a data centre.