There are a few things being actively developed around this area, things like Fuse fabric and gateway are all solving a similar problem but with added functionality. I'm not sure if there would be any advantage of doing it via DNS. Saying that i don't know much about how much DNS could be leveraged for clusters that are elastic or where backups come and go.
I can't say that it would be a bad idea. However, I'm having trouble understanding what specific use-case this functionality would service that isn't already covered by the clustering tech we already have (including static, UDP, and JGroups integration). I'm not saying it wouldn't. I just don't understand it well enough.
Also, I think any such implementation would need tests in our test-suite to validate its functionality which would likely require a Java based DNS implementation whose life-cycle could be integrated as part of the tests.
Finally, it seems like there would also need to be some kind of tool to query and/or manipulate the DNS entries.
@dpocock, can you comment on Andy's reply? How does this work when servers are coming up and going down frequently? Do the DNS updates make it into the client's hands in a timely manner?