As someone who has a 1gb/s flat rate at home, I have thought about doing something similar. It really isn't that expensive to have a bit of network and a server that gives out static content.
We were talking about the expenses of running the service, and not the legal space around hosting user generated content.
The legal questions are interesting, through it highly depend on the country and political tendencies from one year to the next. In theory, I could run this kind of service in Sweden, and only remove content on order by a judge. In theory. In practice, there might not be any difference between hosting user generated content and simply having a website up hosting in ones own name.
