Actually, the auto email skips that step because the FTP layer should not be used/enabled at all on DreamHost. It is important that you understand joomla! does not need to utilize the ftp layer at all when installed on a DreamHost shared server.
If you do include setup information for an ftp layer, joomla! will try to use it, and if it is not setup properly, or there are permission issues between the ftp user for the ftp layer and the machine user that is joomla! is running under (your user), you will have problems.
Even if you have the ftp layer setup “correctly”, unless you use your own ftp user when setting it up, and use a directory within your own machine user’s space, you will have permissions issues due to the way security is setup on DreamHost and the linux filesystem’s permission management. There is more information about all of this in a previous post where this is discussed.
If you review the information in that post, you will see that you should not use the ftp layer on DreamHost; it is only needed for some systems that do not have the “robust” PHP-CGI environment that DreamHost offers (running under suEXEC).
–DreamHost Tech Support