They handled it in classic Dreamhost fashion, too. Heavy on the comedy.
A lot of customers were unhappy with the nonchalant attitude.
This is a pretty sterling example of Paul Graham's "dignity is deadly" quote:
When you evolve out of start-up mode and start worrying about being professional and dignified, you only lose capabilities. You don't add anything... you only take away. Dignity is deadly."
I have been a Dreamhost client for several years, and I've been pretty happy with their overall service. This isn't the first time they've admitted doing something stupid.
Before Dreamhost, I was a client of Westhost. They were fine too, until they instituted a major migration to virtual servers.
It was a disaster.
Site response time slowed to a crawl, and their forums were saturated with angry customers. Ticket response time went from hours to days.
Westhost handled the situation "professionally". By this, I mean they did not acknowledge the problem for several days. They eventually posted apologies and explanations which contained no information about the root cause - just hollow words: "unfortunately, some users are experiencing problems, we are working on resolving issues", etc.
"Professional" can mean a lot of things. It usually means "Cover your ass".
The Westhost problems persisted for weeks. I'm sure they've been since resolved (since Westhost is still in business). But their "professional" communication with customers made me leave.
The deal with Dreamhost is:
1) When they do something stupid, they admit it immediately and take their lumps.
2) They come across as a bunch of clowns sometimes.
I don't think you can have (1) without (2). Maybe it can be done, but Dreamhost won't be the company to do it. Their company DNA is pretty well fixed. In startup mode!
As always - many problems