I always assumed the problem wasn't necessarily finding a better web host, it was finding one that wasn't going to immediately kick us off for TOS violations at the first complaint.
I want to add one more thing, not to argue but for informational purposes. The whole reasoning of being safe(r) from TOS violations has never really held water with me. It sounds like a great sales tactic though. I can imagine Tera being led to believe something along the lines of "You pay us an exorbitant amount of money every month and we'll turn a blind eye to any copyright violating images you have on your site."
However it starts to fall apart when you see a site like e-hentai.org which is littered with copyrighted pornographic images and has a forum. It's like the Collective only even bigger and I imagine harder to manage. A WHOIS lookup would likely say who their host is. and they have gallery software that... mostly works. Images occasionally load slow or won't load, but they have a workaround now and I have never had the site go down because of internal server errors. F-list is another site similar to this though with a wider degree of fetishes and more of a focus on role play.
These are examples of sites similar to this that work, and with a move to a new and hopefully cheaper host, that would free up money to make improvements to this site. Maybe that's what you guys are doing. I just wanted to point this out.
The biggest problem is keeping all the data. Nobody wants to lose the gallery photos that we already have.
We are trying our best to work with the system that we have, but, short of a full time developer to try and rewrite half the code that this site is sitting on, there aren't many options available on the table.
E-Hentai runs on a much cleaner solution that isn't available to us. They probably run on equal hardware as us, but because of the underlying code, are able to maximize their database efficiency. E-Hentai is likely also managed by a developer, since it's running on a custom solution, and is likely consistently updated.
Copyright is a big issue because the Collective is hosted in North America. Tera also does not wish to violate any laws that her country participates in, and that is her prerogative. The current hosting choice has nothing to do with DMCA. Dreamhost participates fully in all copyright protection laws.