To take this to the extreme: you could shut down an innocent business that hosts on DigitalOcean by posting a threatening or defamatory comment on their blog, then making an abuse report. This puts them in the position of hosting such speech, and permits DO to cancel the service without recourse as a TOS violation. That's what you're OK with if you're OK with that being a term of the agreement. You point out that there's no first amendment issue here, but there's a lesson to be taken from the bill of rights anyway -- that sometimes protecting the rights of everyone means also protecting the rights of specific individuals you disagree with.

There may be small risk of this scenario happening, but if you are comparing to another host that doesn't make service contingent upon policing of content you host, then any risk is infinitely larger than necessary. In general, minimizing the ways my business could be wiped out by some service provider helps me sleep better at night. If a user uses a service I provide to host something defamatory, I want there to be a court order before the web host goes flipping power switches on my racks, as it's likely I'll have been contacted by someone before it gets to that point.