http://serverdensity.com/ is another interesting newcomer.
(This is a product from my company)
A hypervisor for server providers that does these tasks in background (without the root server owner seeing it) and alarms the provider if a hd breaks down, temperature is too high, etc! Which can then automatically react.
I think there is a need for your service, but I think it's too expensive. I wouldn't use it. A server starts at 50€ per month, why spend 1/4 of it just for monitoring?
It's therefore about the value the service gives you i.e. support, ease of use, fast setup, easy alerting (e-mail & SMS) and so on.
In short - if your model works, great, but I can easily see it not working due to the service not being positioned properly.