IMO, the real problem is still the abundance of cheep land.
Hell, you can probably move to the middle of a desert in the Southwest and get more land cheaper. Just build your house underground.
There is simply no way you can get seaborne property cheaper than you can on dry land once you factor in building and maintenance costs.
[edit] You're right about the allodial title, but mortgages can be paid off quickly and taxes are actually useful for some things. Unless you're going to live by yourself on the ocean, there's going to be some form of "taxation" to handle common expenses...like protection from pirates as mentioned.
Seasteading is not about cheap real-estate. It is about reducing the barrier to exit, in order to encourage healthy competition between nations for customers (e.g. citizens). http://www.seasteading.org/stay-in-touch/press-releases/intr...
"The world needs a new model of politics where a diverse ecosystem of providers offers a variety of institutions that evolve to serve their citizens. The open oceans, Earth's last frontier, are the ideal place to nurture this vision of a better world. By making it safe and affordable to settle this frontier, we will give people the freedom to choose the government they want instead of being stuck with the government they get.
http://www.google.com/search?q=site%3Aseasteading.org+monopo...
The Industry of Government
Think of government as an industry. Citizens pay taxes, for which they receive government services. Each government has a monopoly over one geographic area, but citizens can switch providers by moving to other countries. This industry has two main features that make it horribly uncompetitive.
❑ High cost of switching providers:
The first is the cost of switching providers. Because of the geographic monopoly, in order to change governments, you have to change countries. That means you have to leave your job, sell your house, pack your possessions, leave your friends, apply for new citizenship, get a new job, buy a new house, and so foth. This cost is enormous compared to any other service provider switch (cell phones, car insurance, even employers). Because of this people are unlikely to do it very often. For it to be worthwhile to move, the difference to an individual between two governments must be higher than this huge cost. This dramatically reduces market feedback for providers of government services. So its natural for govts to exploit the current customer base, because of this huge barrier keeping them from leaving.
That said, isolated communities in the US come pretty darn close to this already. There are any number of compounds in the Western states where the government takes a very don't-ask-don't-tell stance towards any number of generally applicable laws. The surprising thing for a lot of people with the raids on the polygamist compound wasn't so much that the government would raid if it suspected you were marrying off children but rather that it would take that much to get them to be interested in a township's internal affairs -- people often expect the government to be rather more omnipotent than it is or cares to be.