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It turns out that IP(v4) addresses are 'valid' domain names, in the sense that they're made up exclusively of allowed characters, namely numerals and periods. However, if one were to create a site with an IP address for a name, it would be unreachable. The only exception(s) would be if the IP address in question was pointing to the Aegir server. But even there, the site doesn't work, and I don't think it's worthwhile exploring why.
So, I suggest that we add a form validation to ensure the site name is not an IP address.