I thought cost was a blocker too till I actually sat down and worked it out. A cheap microserver with about 15TB of disk space came in well under the thousand pound mark - the real blocker is sitting down and actually ripping the things. There's a trade-off between space and encoding quality to be made, but I'm entirely happy with libx265's results at 1080p.

Obviously your mileage may vary as to what's a reasonable cost.