As for the disappointment at BlueHost - they should have probably let the customer know before taking action - but other than that I think they did the right thing. As a veteran of the hosting industry, if one of your customers wordpress blog was hacked and hosting a phishing site, would you not disable the site and let the customer know right away that they need to clear things up? That's just a random example, but any sane company will protect their servers via a TOS - if they didn't I would be quite concerned about the service they are offering. Just my $0.02 on this..
There is nothing intrinsically bad about DNS that it needs to be turned off; the OP has already said they were using different hosting.
BlueHost was in no way vulnerable, and in no way needed to protect itself, as the only traffic was DNS requests. GoDaddy tries to pull the same thing with disabling DNS[1].
I feel like we need a Chris Crocker video about DNS systems this month.
1: http://en.wikipedia.org/wiki/Go_Daddy#Suspension_of_Seclists...
The internet is full of user-generated-content sites and the core objection to SOPA is that we cannot police every posting. We do not currently have a legal obligation to do anything other than respond to complaints.
Further, as a veteran of the hosting industry, I'm really disappointed in BlueHost for taking action against a paying customer's domain name. Be sure to read the SLA and TOS when you sign up for services.