I've been a fan of this sort of thing for several years now. Of course back in the day it would get you complained at for violating the best-practice of not keeping heavy objects in the Application or Session state (presumably because back then you only had 500mb of it).
If you go play around on Twiddla today, chances are nothing you do there will end up on physical storage, ever. All the sandboxes and guest sessions spend their entire lives in memory, and only in very rare cases get persisted to the database these days.
One side effect of doing this is that it makes scaling out a lot easier. If we ever hit a traffic spike that bothers our server, I can spin up a few EC2 instances and hand off the actual Twiddling to them without having to worry about what to do about getting the data written back to the database.
It also makes a nice differentiator between free and paid plans: If you need the ability to save your stuff, we're happy to let you pay to do so. If not, go nuts, since it doesn't cost us anything to keep you in memory.