This is the proper thing to do for DreamHost. On an un-related matter, domain registrars (Google, Go-Daddy) shouldn't be the ones censoring free speech of the alt-right by revoking Daily Stormer's registration. However vile and despicable the views expressed on the site, they have a constitutional right to it. If they indulge in illegal activities, alerting law enforcement is the recommended course of action, just li…
Google and Go-Daddy also have a constitutional right not to associate or do business with the alt-right (or really, anyone else they disagree with). You are protected from the government restricting your speech, no one else has any obligation to put up with you.
JimBob's Cake Bakery also has a constitutional right not to do business with same-sex couples (or really, anyone else they disagree with). You are protected from the government restricting your speech, no one else has any obligation to put up with you.