DH can support any one person - or even a bunch of people using all their space. If everyone suddenly used all their space, there would be trouble - that is, DH would have to buy a lot of disks and start losing money.
Consider the provisioning of electricity. Does the electrical grid have the capability to supply everyone with electricity should everyone turn on every electrical device that they have? No, the grid would brown out or selectively shut down service. Should the grid be designed to generate enough power to handle that situation? No, because the probability of that occurring is so minuscule as to be not worth paying for.
As others have said, the servers themselves have the same physical specs as the other servers at DH, they just run Lixux VServer which allows them to guarantee a certain amount of memory and CPU to individual accounts (as represented by virtual servers). These dedicated resources are costly and you pay extra for the guarantee that they will be available to you when you need them.
The economics of promo codes is actually related to the economics of affiliate programs. Acquiring a new customer is profitable enough in the long run to make it worth paying extra marketing money to obtain that new customer. I'd guess that the low-cost shared web hosting business is willing to pay between $50 and $150 for each new customer. DH pays $97 for each new customer. The "cost" of the promo code actually comes straight out of the referral fee for the affiliate. From the DH perspective, they pay out the same amount for each referred customer regardless of whether they use a promo code or not.
So who loses in this scheme? I think it is the professional marketers. Because of the way promo codes work at DH, it tends to be much more profitable for professional marketers to promote the other web hosts who have schemes that richly reward the marketers much more than the actual customer who is signing up. In practice, the Dreamhost system makes it less lucrative to refer them and more lucrative to refer people to other hosts.
Is this fair? Well, I can't speak to it's fairness, but the policy is a really great deal for new customers!
What are [color=#CC0000]50DISK50[/color], [color=#CC0000]3DOM50[/color], and [color=#CC0000]1IP1DOM50[/color]?
They're Dreamhost coupons!