They offered very cheap and generous disk space, but only for the purpose of serving web content... not personal backups. Obviously they were counting on most people not using it all.

They ended up specifying a percentage of your quota you could use for any sort of backup or personal storage to try settling the matter.

It was a very long time ago, but I had a long running account that was in the $5-10/month range that I used to host my email, a blog, and a self-hosted picture sharing app. IIRC, the plan either had unlimited space, or the space limit grew every month. I had 100's of gigabytes of photos that were accessible via the photo app, and I had some small % of files in a folder named backup that wasn't publicly accessible to the internet.

Apparently backups of any kind were not allowed by the TOS, but this was buried somewhere deep in the TOS, and once they made the decision to shut me down there was no recourse. I had something like a week to move everything away from dreamhost. I believe my account was targeted because I was using a large amount of disk space (for TOS legitimate purposes) and they wanted to find any reason to let me go.