This is very similar to a project I'm working on called Sim95 [1]. It has an entire networking stack and visual basic style language. You can host your own websites, chat servers, anything you want, and everything runs over a virtual network (websocket that passes through a relay).
It has all the warts of the early internet era: you can program a virus, get people to download it, delete their documents, etc., but it also has a lot of the charm, build a website, chat with strangers, enjoy the lack of facebook (for now until someone builds it).