Wouldn't that neatly solve the content moderation problem? You register your server on an index or two, and you choose what your server will publish and accept. Each user would be responsible for finding a hosting provider who doesn't have a problem with what you post, and problematic content reports would go right to the hosting providers. The indexers could basically be DNS for usernames.
The AWS free tier would cover 99% of people, and between VNC and web UIs, you wouldn't necessarily need them to ever touch a shell. Plus, requiring a reasonably consistent public IP address would help to cut down on bulk spam.