I would recommend using 127.0.0.1 if your going to give a bogus DNS server address. 127.0.0.1 is used for another purpose, so using it as a DNS server will prevent any connection.
Alternatively an easier way to do this is just unplug the internet cord from the back of the router, your 3DS will still connect to the router (and save the connection) but obviously wont connect to the internet.
EDIT: Just to clarify, you should not even get to the popup about an update, it should show a red X over the internet globe, and on the bottom screen say something like エラー and then some numbers.