I think anyone will do this, I've never seen an AUP to restrict this - though it can be.
It is your own responsability what you do with the server as long it's legal this is the main point.
Beware, those proxies sites makes a *lot* of traffic and you will easily run out of your monthly bandwidth. There were people complaining on forum and pointing to their provider who charged them for addition bandwidth.
please, bear with me. tell me when I'm wrong, I'm not doing it on purpose
well I would imagine things like dos attacks, some sort of spam stuff where they use the proxy to hide the real site... I am not saying I don't want to work with the hosting company, I just want one that will work with me as opposed to against..