Bottles of Milk should have two uses for the sake of maintaining a fair balance between damage taken and damage recovered. The reason for this is that not only does milk have two uses in a different Zelda game (Ocarina of Time), but the second usage makes the trip to Lon Lon Ranch much more worthwhile. During the later dungeons of the game, it's fair to say that the bosses and enemies become progressively harder and the user soon realizes that all of their heart containers with an added 5 hearts in their inventory is not usually sufficient to keep the user alive throughout the course of the level.
One alternative solution to the two uses of milk is to instead allow the user to carry a second bottle, obtained by a means that has yet to be determined. That way the user does have two uses, but cannot stack both of those uses into one bottle. It also allows the user to have a second bottle on hand in the event he or she needs to carry a different bottled item. Doing this, however, may have adverse side-effects if you have additional plans for bottled items. This brings me to the next point.
A very useful item and aid in battles, especially in the harder dungeons (specifically D5 - on), is the use of a fairy, rather than a bottle of milk. I know for a fact fairies exist in this game, because I remember spawning a few and capturing them. The only problem is that fairies have not been practically introduced into this game thus far. The nice thing about fairies is that it would be a very easy and wonderful solution to the lack of health in most dungeons, as they will restore all of your health upon use. Even if fairies don't function as an "extra life" upon death at the present time, it would be a good addition to the game. The only thing you'd have to do is to introduce fairies to the game somehow.
Excuses for not adding such solutions as the ones shown above are usually reasons for being lazy or not wanting to do it, for example: If the excuse for not doing any of this happens to be that you wish to make this game more "party-oriented," you must keep in mind that although it would be nice to have a party-oriented system, the number of players generally fluctuates between 1-7 players, and most commonly 1-4. This lack of player density indicates that this game is not yet ready for a party-based system, and therefore renders the logic of having a team of individuals running through dungeons together.. well.. illogical.
To be to-the-point, having two uses instead of one use for a bottle of milk would be a good idea, seeing as how it doesn't fully restore health yet can provide health more than just once, as one time isn't usually sufficient. If a second bottle was introduced to the game, it could understandably have the same primary function, although that may offset balancing issues, due to the variety of content that can be stored in each of those two bottles. Introducing fairies to the game would be a wonderful solution, although typically it would be impractical, seeing as how two drinks of milk would have the same effect in most situations, seeing as how 10 heart containers is an upper limit at the present time for health. Excuses for not implementing functionality for more health restoration on-the-go for players are mostly just that: excuses. Sure, you add plenty of pots and whatnot in dungeons to allow people to restore health via hearts found by picking the pots up. The downside to this is that the pots are easily bugged and eventually only serve to be an annoyance as they become unusable.