Your administrator seems not to be very knowledgeable. Your server will be running only one Web Server no matter how many domains you point at it. So increasing domains does nothing for performance.
Likewise, you are unlikely to be running more than one copy of the MySQL database application on the server no matter how many databases it is managing. In addition, managing lots of access to lots of data is what Databases are all about.
So, yes, this is a bad idea.