In general, yes, that solves the problem for local domains. But anyone who needs to do anything at all complicated is going to have trouble with this, not just Pi-Hole users.
For example, take your average John Doe who uses Firefox. Not particularly technically competent. A new version of Firefox comes out, and all the Archive.is domains break. Who does he blame for that, and how does he solve the problem?
What's happening behind the scenes is that Firefox switched his DNS address on him without warning. And Cloudflare (the DNS endpoint used by Firefox by default) returns incorrect IP addresses for the Archive.is domains (because the admin of these domains returns fake addresses to Cloudflare from their authoritative DNS server).
Most people are using DNS provided by their ISP, so they haven't seen this problem before. I know about the problem, and my resolver (Unbound) is set to use Cloudflare over TLS for most requests, but sends Archive.is domains to Google's DNS instead. This solves the problem for me. Firefox switching to Cloudflare by default not only breaks sites like this for the average user, it even breaks my workaround that fixes the problem.
(I can't currently reproduce the problem, so maybe Archive.is caved and started sending working IP addresses. But it's the sort of problem that can happen when you start messing around with DNS. Your users will blame you if a site doesn't load in your browser, but works in other ones.)