DamnSkippy is wrong, as koniosek points out, as far as email is concerned.
But it's not a bug in Exim. It's a limitation in how MTA daemons work.
The MTA daemon has to presume local delivery for mail domains on the server, and here's why:
Let's follow one piece of email from me to you.
The email to you comes to your server on port 25. The MTA has to decide whether or not to accept the email. So it checks to see whether
[email protected] is on the server. It discovers that your mailbox is on the server.
So your MTA (in this case Exim, but they all work pretty much the same way) accepts the email and decides what to do with it.
It checks to see if the domain is handled locally, and if so, it uses a local delivery router (that's the one causing the problem you so well describe).
Mail delivered.
But using your method it would never use the local delivery router. Instead it would send the mail back to port 25 for Internet delivery.
Whoops. Endless circle, which Exim will figure out eventually, and the email will be frozen. And never delivered.
All the emails destined for your server.
How do we solve this problem? We use two MTAs, one that never sends emails, but only receives them, and one that only sends them.
You can do this several ways. The most obvious is to have separate physical machines; that's what the big ISPs and the big hosting companies do. I don't know of any hosting control panels that support using multiple MTAs, not even the ones that support multiple servers.
Another way, less obvious, is to have two MTA daemons running on one server. A lot of setup and configuration issues, but doable. Remember though, that you can only have a daemon listing on one port/ip# combination.
So it would require a minimum of two IP#s per server and some not insignificant amount of work.
And of course that still doesn't stop DA from adding domains. I'm absolutelyl against using whois lookups (and there really isn't any alternative) because:
1) there are too many times every day when whois isn't available.
2) it would make it impossible to host the larger number of people these days who use "hidden" information in whois.
3) it would be very hard for DA to determine from whois information whether someone is authorized to run a subdomain.
4) even if it could be determined, it wouldn't work for people who use slightly information in all their whois records, such as a different email address or "box number" or other tracking information
5) and I could probably think of a dozen or two more reasons if I didn't have to leave for a meeting in about three-quarters of an hour.
Jeff