I'd host my own servers otherwise, but I'm obviously in the minority. I can't host my own BF3 servers, so I'd love a service which let me do so.

Figuring out how to do in-game server creation and signup would be even better, maybe as a revshare partnership with the game publishers or developers.

In general focusing on games where the server is needed for fair play, and people who play with strangers, seems like it could be viable. I'd be unlikely to trust someone else's server to not be hacked (although most hacks are client side, there's stuff you can do on the server too).

Maybe integrating some nice voting, voice chat (STILL a weak area on pc gaming vs. xbox360), ladders/ranking, training/clan servers, etc. would make sense, as soon as you leave the Minecraft specific world.

The next step after that is making MMO-type persistence and maybe selling items even easier for small game developers; an alternative to EA or Steam for self-distributed games? Or things which Steam doesn't provide.