That we cannot. Dreamhost has the wrong version of the LibXML2 library on their servers (maybe more; but that's where my compile dies). And I don't want to go out and having to compile that, too (and possibly any other libraries that might be outdated).
PHP5 requires LibXML2 vs 2.5.10 or greater. Dreamhost is still on 2.4.9. And the latest version is 2.6.18: http://xmlsoft.org/sources/
I would also point out that LibXML 2.5.10 is almost 2 years old. I've personally upgraded my company's system and my local system to 2.6 w/out any issues.
Allowing the CGI option is a very good starting ground in converting to PHP5. Sites can then slowly move over, you can lock down things like 'register_globals' by default and it will insure that Dreamhost has the upto date libraries incase a user wants to compile their own version of PHP5.
I'm not entirely sure either where you're coming from how this wouldn't be feasiable. You taking about a performance issue in useing the CGI binary vs built into Apache? Or are you just talking about the technical reasonings of co-existing with PHP4?
Performance is no different, if not better, than running PHP4 as a CGI binary which, judging from the allow_url_fopen announcement, ther are more sites than you realize doing that.
PHP4 and PHP5 can co-exist as easily as PHP3 and PHP4 did during that transition a few years ago. Just name the binary php5 and use traditional apache conf's to link .php and .pcgi to the PHP5 binary just like you would if an entire site opted to use PHP4 CGI.
However, PHP5, by default, installs itself into /usr/local/php5/ to avoid any conflicts with PHP4 that's within /usr/local/php (by default).