I've never heard of an actual dedicated server having a limit on MySQL database size, other than the limits imposed by the hardware installed to the server. Root access or not, your MySQL database size(s) should not be limited simply because you can't login to SSH as a root/superuser.
There also should not be a limit on the quantity of databases you may create as again, if is dedicated and you're the only one of the server, it shouldn't matter what you create or how many you create.
From the sounds of it, 1&1 either need to "can" (or fire) their uninformed staff members or possibly use some of the money they are wasting, before it's all gone, to train their staff.
I would *never* give a client such a chopped up answer.
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