It is important to be able not just to define 2 app servers, 1 DB server, and 2 security groups, but to also point them to each other using lookup mechanism. Especially when creating a complete environment from scratch, you want to ensure the correct order of creation to achieve the flawless bootstrap of each component.
Here, and further in the book, the term environment will mean a complete set of resources that an infrastructure consists of. It includes a network setup, all servers, and all related resources.