fwiw, its sudo that is causing the roundtrip.
you can certainly come up with reasons to pay a round trip.  the infrastructure 
then can make changes and each system magically picks them up.  its the reason 
we don't ship /etc/hosts files around anymore.

all that said, this issue can definitely be handled better than it is.
A couple options:

a.) cloud-init could use manage_etc_hosts=localhost on platforms it
knows will not provide dns lookup (this though coudl change, and
probably should change on lxd, and then cloud-init has to be updated to
accomodate... it gets tricky to service that logic if it ever changes as
customers will use different versions of lxd).

b.) libnss-myhostname might be able to help.  that is mentioned by xnox
in a related bug bug 1730744.

More conversation took place in IRC at
https://irclogs.ubuntu.com/2018/01/04/%23ubuntu-server.html#t14:57

** Also affects: cloud-init
   Importance: Undecided
       Status: New

** Changed in: cloud-init
       Status: New => Confirmed

** Changed in: cloud-init (Ubuntu)
       Status: New => Confirmed

** Also affects: cloud-images
   Importance: Undecided
       Status: New

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You received this bug notification because you are a member of Yahoo!
Engineering Team, which is subscribed to cloud-init.
https://bugs.launchpad.net/bugs/1741277

Title:
  Not all platforms running cloud-init end up with the system hostname
  resolveable by default

Status in cloud-images:
  New
Status in cloud-init:
  Confirmed
Status in cloud-init package in Ubuntu:
  Confirmed

Bug description:
  Except for existing setups, almost everyone will want
  manage_etc_hosts: localhost by default. Without this, various things
  end up broken because a system can't look up its own hostname.

  Are there any use cases where a default of manage_etc_hosts: localhost
  will cause problems?

  To avoid stepping on people's toes, I'm not suggesting making the
  change retrospectively. But if new Ubuntu releases start doing it (eg.
  with Bionic) and old releases maintain existing behaviour, then we'd
  get there over time. Is there any existing mechanism or process for
  changing cloud-init defaults like this?

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