Some of our Openstack users run quite large number of dnsmasq instances
on single host. They started hitting default limit of inotify socket
number on single system after upgrade to more recent version. System
defaults of sysctl fs.inotify.max_user_instances is 128. They reached
limit of 116 dnsmasq instances, then more instances failed to start.

I was surprised they have any use case for such high number of
instances. They use one dnsmasq for one virtual network.

I found simple way to avoid hitting low system limit. They do not use
resolv.conf for name server configuration or any dhcp hosts or options
directory. Created inotify socket is never used in that case. Simple
patch attached.

I know we can raise inotify system limit. I think better is to not waste
resources that are left unused.