If your content is such that Rackspace closes your account, reliable hosting probably isn't nearly as much a commodity as you describe. All hosts have clauses in their TOS to let them close your account if you become an inconvenience.
Yes, but hosts typically respond to outside pressure and it could very well be that someone else's stuff gets taken down with your stuff being collateral damage.
In that case it pays off handily if you have your content spread. Of course, if you're going to do something that is illegal then it doesn't really matter where you host, then you are basically just counting down until you get booted.
You can often approach hosting providers out of band and arrange deals for sites that are normally against their TOS. I've seen it happen on multiple occasions.
