Because "anyone can do it" and because "it has a business model" means it becomes a cut-throat commodity business. Now if re-define this and pick other types of processes that you can you can host, you might be able to apply the ideas of hosting in new/novel areas.
well, for the second part of your comment, dell did it for the PC industry, which was viewed as a commodity business. for web hosting, just think what amazon is doing these days
uh, yeah. they can also fail just like "web startups" - it's just you have a more obvious business model.
Me, I've been running a Xen virtual private hosting company for the last few years. I sold backup space before that, and was utterly crushed by amazon S3. By the time EC2 was in public beta, I had been selling Xen VPSs for some time... they were cheaper than me for a while... but these days I'm rather a lot cheaper. Still, the competition is fierce.
Sure, you don't need to get venture capital (one of the main reasons why I chose it, also, because I already have an important asset: I'm a pretty good SysAdmin, and I'm good at finding .) but there's no guarantee that you will make money. Margins are pretty thin, and like everything else, people still want to see you advertise.
I would argue that it's not something 'anyone can do' any more than writing a webapp is something 'anyone can do' - either way, you need some technical skill, or the money to buy some technical skill, along with business and marketing skills.
Because "anyone can do it" and because "it has a business model" means it becomes a cut-throat commodity business. Now if re-define this and pick other types of processes that you can you can host, you might be able to apply the ideas of hosting in new/novel areas.