I'm out of the loop on this, can someone explain who this is and why this is bad?

.lan is widely used (by OpenWRT and Ubiquity and likely others) by home / SMB routers, where all connected devices will automatically be assigned hostname.lan. Technically, .home.arpa and/or .internal are designated for this, but .home.arpa is pretty clunky and they're very new (.home.arpa is from 2018 and .internal from 2024). Usage of .lan for this predates either.