Here’s a comment: DDOS attacks are hard to defend against. If they can take down sites like Microsoft and SCO, you better believe that a small company the size of DreamHost will have problems dealing with it. If an attack against a single customer’s site brings down 50,000, and the answer is to nix the customer’s site, then that is what has to happen. As Spock says, “the needs of the many outweigh the needs of the one.” A company having DDOS attacks has a very serious problem, and one that is not easy to solve.
DreamHost has stated that they are upgrading equipment, so that they will hopefully be able to better withstand such attacks in the future. I believe that they will do so.
Also, as for ditching the single customer, I have to believe that DreamHost would not just “pull the plug.” I believe that they would try to help the customer find alternate accommodations. If someone finds out more about how DreamHost handled this customer, please post it here. Also important (at least to me) is what the customer did to be experiencing such an attack. Despite all the media coverage, a massive DDOS does take time, skill, and effort to pull off, and usually means a very upset person.
In my opinion, bottom line is that a site experiencing DDOS has to handle that type of problem on their own, and it will cost a lot more money than just a $80 a month or even a $500 a month business hosting plan.