I'm asking why these records were held in the first place. If they didn't store the data in the first place, there'd be nothing to preserve. The government could send preservation orders all they want and Dreamhost wouldn't even have to go to court because they could comply without hurting their customers' privacy.
18 USC ยง 2703(f) - A provider of wire or electronic communication services or a remote computing service, upon the request of a governmental entity, shall take all necessary steps to preserve records and other evidence in its possession pending the issuance of a court order or other process.