It sounds awesome. Almost everything we do is bound up under serious NDA. I don't see any story here about security.

What would rule would be if someone could build a service like this but use something like Slicehost as the deployment environment, so that each customer got their own machine. I wouldn't even need root, or even a shell login. I'd feel instantly 10x better.

This is going to come across as paranoia from a security geek, and that's a little true, but its my clients concern that's controlling here, and they're not paranoid security geeks; they're Fortune 500 IT/dev shops.