I've heard of several news websites doing a version of this, with some success.
For instance, one New Jersey newspaper has a forum called "Take It Outside," where the comment policy is not as strict as in other areas of the site -- basically, only profanity and pornography get banned, but everything else is fair game.
The idea is that if you give people who want to post trollish comments a dedicated place to do so, maybe they'll gravitate there and stop bugging everyone else.
Then again, I suppose a true troll wants to bug everyone else.
Quite a number of newspaper websites employ exactly this technique.
At the site I work for, we call it "bozo-ing." We've had users who have been in their own Troll Fantasyland, as you call it, for many months without realizing it.
I tried this once, but they figured it out very soon and it generated a lot of additional anger. Many trolls honestly don't consider themselves trolls, and will be angered by being invisibly treated as trolls once they found out.
Yes, both of those. They also often have multiple (dozens of) accounts. Trolling seems to be one of those activities where you really get in the zone, because they seem to have infinite amounts of time and energy.
What you -could- do, however, would be to give all the trolls a share fantasyland. They'll feed each other.