Earlier quoted context omitted.
Right now the subject identifier in a Let's Encrypt cert must be a DNS name, not an IP address. From the ACME protocol specification draft: "Note that while ACME is defined with enough flexibility to handle different types of identifiers in principle, the primary use case addressed by this document is the case where domain names are used as identifiers. For example, all of the identifier validation challenges describ…
This is in line with other CAs - no certificates should be issued for IP addresses or internal server names with expiry dates after November 2015. See for example: https://www.digicert.com/internal-names.htm
https://cabforum.org/internal-names/
The PDF document defines "Reserved IP Address" as "An IPv4 or IPv6 address that the IANA has marked as reserved".