I’m not 100% sure, Kareem, but I think that the actual deletion is “batched” during an update, and that the database may only be actually deleted some time after you delete it in the Control Panel.
The way DreamHost is set up, you can only create databases from within the control panel. You cannot do it from phpMyAdmin, or from the command line in the shell. I am not sure why DreamHost did it that way, but it is by design, so nothing is “wrong” that you can’t do it.
It could be because, in years past (a long time ago), DreamHost made MySQL databases an “extra” service, with an extra charge, and they used the Control Panel to control access to database creation.