Is Dreamhost a reseller?
And why do the terms and coniditions have that clause about terminating an account if the webspace is used for anything that isn't publically in use?
I fyou mean, is dreamhost just reselling hosting from another company, no. Dreamhost does allow you to resell your own stuff, they just don't exactly provide a means to that end.
As to the clause, I have no idea.
Where is that clause located? I want to see what the extact wording of it is.