In what circumstances can this happen without prior dialogue with the customer? (Which I think is what the OP is mainly asking about).
The problem is (as I understand it) that there is no way for a customer with a closed account to contact dreamhost (there is no phone number).
Suppose I am on holiday for a week without email, and during that time a hacker breaks in to my account and uploads illegal content.
Dreamhost presumably emails me and demands that I fix the problem, and gives me 3 days (I’m guessing here, please can someone correct the figures). I do not reply (not having seen the email) so they close the account.
I come back from holiday after a week, find my account closed and no way to contact dreamhost. Is that possible?
I would be very happy to hear the dreamhost will disable the websites but not actually close the account until it is obvious that the customer is not cooperating.
Please say that!