I think your question is particularly good, as you are not only concerned with "how to do something", but are also asking whether you should do it. Yes, you can set up your own version of PHP to set allow_url_fopen to on. You can do this by either compiling your own version of PHP, or by using your own "instance" of the Dreamhost supplied PHP with your own php.ini file. Both methods are well described in the wiki (as I'm sure you know).
As to whether or not it is "recommended", I have no doubt you will receive varying answers on this, as people often disagree on what is the right way to approach an issue. My opinion, quoted verbatim from a previous post in this thread is quoted below:
Ok, I've got my asbestos pantaloons on, as I fully expect the the flame fest to begin.
In my opinion, though it may seem harder for your at first (particularly if you are trying to "plug and play" a script, which you didn't write, and which relies on url_fopen), using cURL is a much safer way to go.