We're dropping this concept with a proxy daemonset now because benefits are very small compared to a regular service. The only actual advantage we had was that localhost:5000 worked both in the cluster and in local development, but that was until kubernetes/kubernetes#40891.
We now use image: [clusterIP]:5000/... instead, after adding clusterIP: 10.x.x.x to the service.
External access through node IPs is also possible, but unless you've overridden the port range allowed for services that will have to be on a 30000+ port number, for example add to the service:
nodePort: 30005
type: NodePort