MIAB is setup as a DNS server (Or nameserver) because it can manage ALL DNS entries for a domain (e.g. example.com) This makes setup SUPER simple for even beginners.
You can use external DNS, but you have to put all the DNS entries in yourself at your registrar (That’s like 20+ entries for 2 domains)
TL;DR: MIAB manages it’s own DNS to make setup simple for anyone and everyone.