Yes, sure, if your dns cache is full of porn sites, one may be able do deduce that you're actively visiting porn sites, but there are lots of sites on blocked/porn net nanny lists that are not actually porn.
If your dns cache is full of right wing news sites, maybe you're right wing right? or wait, maybe you're not ,but you keep tabs on them, or maybe your brother used them.
For instance, back when i was playing WOW a lot, I was also authoring (legal) addons for it. Since one of the activities I was supporting with dual boxing/multi-boxing (one player playing on multiple characters at once (each through their own paid account - legal under the TOS of the game), I did need to tread carefully to keep from crossing the line into what they'd consider "botting" (automation that allows an account to play without human intervention). I did research on some of the bots / botting that was available at the time - as part of understaning the difference (I never downloaded or used one, but yes, I surfed around and very likely included some "bad sites"
My point being that dns histroy is only the grossest of measures of what you're doing on your pc - yes, it may be true that someone who never visits hack sitex/cheat sites will be less likely to have them show up on dnscache, but if they're active in gaming forums or if they're jus plain inquisitive, they could so easily be falesly accused.
Someone who is actually cheating would likely be able to quickly figure out that they should use another computer to download/browse and/or ipconfig /flushdns before playing, etc...
Like most all copy protection - it only stops the casual user and inconveniences many legit users. Anyone actively cheating with any amount of effort will easily avoid this.