What is dnsspam, and why is it bad?

Looking at several RFCs about computer and host naming, the conclusion is that hostnames should be hierarchical (which means that it should be something like computername.subdomain.domain.topleveldomain). This can be read in RFC-1178 (Choosing a Name for Your Computer) for example. From RFC-1034 we see that

The result was several ideas about name spaces and their management [IEN-116, RFC-799, RFC-819, RFC-830]. The proposals varied, but a common thread was the idea of a hierarchical name space, with the hierarchy roughly corresponding to organizational structure, and names using "." as the character to mark the boundary between hierarchy levels.

Nowhere it is explicitly mentioned that hostnames must be hierarchical, but on several locations it is mentioned that they should be. A non-hierarchical hostname is called dnsspam or dns pollution.

So, it's all up to you how you decide to name your machine. You can name it hierarchically, like towel.home.example.net, or you could make a 'cool' sentence for your pc: i.am.such.a.cool.person.because.i.came.up.with.this.example.com. Note that this is only important for reverse lookups: the lookup of the hostname that belongs to a certain ip. Many machines have several hostnames pointing to them for several uses (e.g. mail.example.net, ns1.example.net, www.example.net) but usually a machine has only one reverse lookup.

Where are 'cool' reverse lookups important? Well, almost nowhere. Many internet servers require you to have a reverse to use them, but it doesn't matter what the reverse is, as long as the forward and reverse lookup match. The only thing on the internet that I'm aware of where your reverse is shown is IRC. Some people think it's 'cool' to be on IRC with such a non-hierarchical hostname, and other people think it sucks.

What's important here is what the administrators of the IRC server(s) think. After all, they provide the users with a free chat service. They do this on certain conditions, for example that you can not use their server if you use it for advertising purposes. Some administrators agree with the idea that hostnames should be hierarchical, and therefore they ban people with 'cool' hostnames from their servers.

So, in short: nobody can force you to make hierarchical hostnames, but they can deny you access to their servers and/or services if you don't.