loopback is not mentioned in "community/contributors/design-proposals/network/networking"

Because every pod gets a "real" (not machine-private) IP address, pods can communicate without proxies or translations. The pod can use well-known port numbers and can avoid the use of higher-level service discovery systems like DNS-SD, Consul, or Etcd.

When any container calls ioctl(SIOCGIFADDR) (get the address of an interface), it sees the same IP that any peer container would see them coming from — each pod has its own IP address that other pods can know.
By making IP addresses and ports the same both inside and outside the pods, we create a NAT-less, flat address space. Running "ip addr show" should work as expected. This would enable all existing naming/discovery mechanisms to work out of the box, including self-registration mechanisms and applications that distribute IP addresses.
We should be optimizing for inter-pod network communication.

Using IP was already mentioned last year in "Kubernetes - container communication within a pod using names instead of 'localhost'?"

In a kubernetes cluster, a pod could be scheduled in any node in the cluster. The another pod which wants to access it should not ideally know where this pod is running or its POD IP address. Kubernetes provides a basic service discovery mechanism by providing DNS names to the kubernetes services (which are associated with pods). When a pod wants to talk to another pod, it should use the DNS name (e.g. svc1.namespace1.svc.cluster.local)