Rather than start argumentatively by focusing on the areas in which we disagree, I'll first respond that I agree with much of what you write. I probably agree with much more of how you feel about all this than I do with your actual words. I tend to get caught up in the semantics of some of these discussions, and tend to focus on distinctions of methodology, and practice, that many anti-copyright activists seem to believe are unimportant.
I agree that DreamHost, and their customers, are not well served by DreamHost "seeking out" copyright infringement.
I agree that it is probably impossible for Dreamhost to completely avoid the consequences of hosting allegedly, or actual, infringing content.
Like you, I do not feel "seeking out" infringement is a particularly effective tool for saving "time, money, and aggravation". You correctly point out that these irritants are present in one form or another, or from one quarter or another, whether they do, or don't attempt to "police" the actions of their customers. It's very much a "damned if you do and damned if you don't" thing at some level.
I read Cory Doctrow's piece (as I do most of what he, and Lawrence Lessig, writes) and agree with him. I think the DMCA is woefully flawed, is "bad law", and I would like to see it repealed. I am very much opposed to government censorship, for a plethora of reasons that have to do with many things including the economics of "intellectual property".
That said, the semantics do become important, and therein lie the issues where our views diverge. I see very real differences between "seeking out" potentially infringing content, turning a "blind eye" to, or ignoring, apparently infringing content, dealing with such content as it is encountered, and responding to reported allegedly infringing content (whether by DMCA takedown notice, demand letter, casual observation of a sysadmin, whatever)
To the degree that a business is not an arm of the government (though many argue that,in America, they are often cohorts in crime), I believe a business should be free to deal with these things as suits their business model, their politics, their economic sensibilities, or all of the preceding.
This is where I see both Cory Doctrow's pamphleteering and the Internet Archive's librarians' behaviors as being strawmen in the discussion of how DreamHost chooses to handle these situations. They should lobby strenuously for what they believe, and should run their operations as they see fit - and so should DreamHost, or any other host.
I have no more problem with the Internet Archive waiting for a DMCA takedown notice than I do with DreamHost, or another host, choosing to evaluate the reports of alleged infringement received from users, the general public, or non-DMCA compliant demand letters if they choose to do so. These are their machines, and the material stored on those machines is subject to their control, as they define it in their TOS. Certainly, their TOS may not be acceptable for some.
Customers who do not agree to these restraints or terms are not "censored", as they have the free opportunity to set up their own servers and net connections, or contract for hosting with a provider whose terms are more to their liking.
Of course, the market will determine whether DreamHost's, or any other hosts', TOS are sufficiently onerous to prevent them from being successful. To date, the continued growth of DreamHost seems to indicate there is a general level of comfort with their business model sufficient for them to succeed, but that could always change
That is certianly a true statement, as far as it goes, but it ignores the realities of "degrees of consequences" to which a company may be subjected. The truth in that statement does not mean that a company should not be free to attempt to minimize that cost to whatever degree possible, and in any legal manner they choose to employ to that end.
One company may believe that their exposure to such consequences is minimized by "seeking out" potentially infringing content and eradicating it on sight, another might believe that refraining from "seeking out and eradicating" such content while dealing with such content as it is encountered is a more economically feasible approach, and yet another company might feel that ignoring the issue completely until legal process forces some action is the "best" approach (for economic, political, or philosophical reasons). I have no problem with any of those models; I'm free to host where, and how, I choose to host.
I'm at least as afraid of those who would force a host into a "chosen" model as I am of any of the models themselves. That could effectively limit my ability to host where, and how, I choose.
You seem to feel that any degree of pro-activity on the part of a host in dealing with this is impossibly difficult, expensive, and detrimental to a host's business; I'm not so sure that is the case. Either way, it is not your, or my, decision to make - it is the decision of the host. It is our decision as to whether or not we choose to avail ourselves of the services of that host, and we have every right to consider this issue in making that decision.
Of course, the whole state of the law in these matters is a mess in the US; on that I think we agree. It's also true that archivists, creative individuals, and scholars suffer greatly in trying to function effectively and efficiently under the burden of these laws, and I'd like to see that changed.
At the end of the day, I am comfortable with the stated, and demonstrated, positions DreamHost has taken in addressing these issues over the course of the 9 years I have hosted with them. I understand, and respect, that YMMV and encourage you to voice your opinions; I also respect Dreamhost's, or any other host's, right to do business as they see fit.
I also very much enjoyed reading your blog earlier this evening. There is interesting and relevant content there, and your site is outstanding. Thanks!