OK, I'm going to rant a bit here, and it's not specifically directed at the parent comment.
Hashs are NOT a form of magic pixie dust you spread on information to make them magiclly private.
Consider:
You enter your SSN, the app hashes it and then sends it to me to compare against a hashed list of SSNs from some other source. I never get your unhashed SSN.
Are you safe?
No. There is NOTHING preventing me from hashing every possible SSN and comparing them. the total number of possible SSNs (ignoring for the moment that I can narrow the attack space significantly by ruling out SSNs that have not been issued yet) is not computationally prohibitive to search, even salted.
OK, now bringing us back to the case in point.
Does hashing the DNS address provide you any useful privacy preservation benefit?
Well Valve has already said that they have a list of DNS addresses they're searching for. Ergo, they have hashed that list ot compare against your DNS. How hard would it be to hash the $(sites viewed as evil by your cultural/legal framework) and compare it to your hashed DNS list. Trivial.
Do you feel like your privacy is preserved?
Min