Reason #2 really isn't a good one. It's pretty simple to setup subdomains locally (just use your hosts file to configure something like dev.whatever.yourdomain.com to point to localhost). Every webserver I know of supports name based virtualhosts, so it's not even like you need multiple IP's
you cant use wildcards within your hosts file, so you have to manually edit your hosts file for every new subdomain you want to use, I have had a huge hassle doing the same. particularly when you want 1. dynamically generated sub domains, 2. to test a lot of subdomains.
Well, then setup bind. It's not the end of the world :). That, or just use /etc/hosts, it's more of a pain, but for testing you just need a handful of URLs.