Sharon,
There is nothing in writing (from Microsoft or elsewhere) that says that Exchange CAN'T be run on a DC.
Common wisdom (which you will see in writing), though, is that WHEN POSSIBLE, different server applications should be run on separate servers for the purpose of preventing overload of any one server.
Only you can answer whether this should be the case in your situation. You need to look at such things as: other functions filled by the DC (i.e. file server, print server, web server, etc.), number of users supported by Exchange, horsepower of the DC (CPU type and speed, installed memory, available storage space, etc.), is the DC the AD forest root server for several domains, anticipated growth of the network/user base, and soon.
The proof you need to provide will need to come from your server in the form of slow access to files, slow log-on times, bogged down email performance, slow print job spooling, etc.
NOTE: You can't really use the fact that CPU cycles and memory usage are normally maxxed out because the normal behavior of Exchange is to use all available CPU and memory resources while releasing resources to other processes as needed. While you might be tempted to use this as proof to reach your short-term goal of a new server, your credibility will suffer in the long-term if anyone finds out you pulled the wool over their eyes.
The bottom line here is that if you are running a fairly small network, unless you are running other memory/CPU intensive applications on the server (in addition to Exchange), are hosting a large number of printers, are expecting significant growth in the size of your network, or just have an anemic server, you are probably not overloading it.
