Regarding the specific file verification method:

It proves you control the web server that runs under the domain. Which is more 
or less all that you need to prove, since a TLS certificate is designed for web 
security. 

If you don't control DNS, but you do control the web server, you essentially 
control the domain as far as web browsing goes, and thus you should be able to 
acquire a certificate for that domain. Which is probably why it is included in 
the Baseline Requirements as an acceptable validation method.
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