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I have exactly the same thing with my sites I host on GoDaddy. I've complained but there's nothing they're able to do about it. The only answer as I understand is to get a dedicated or semi-dedicated server that allows you to handle multiple domains the right way.
Which is best for PageRank? When multi-Aliases point to same server, with multi-language folders
Anyone who does this stuff knows that PR is per page. But it DOES hurt them because it dilutes their PR. If all incoming links were to the same page, that page would have a much higher PR than any page would if the same number of links were spread out among several pages. The difference could be a page at the top of Google's results vs. several pages appearing lower down in the results. That's how it hurts them.