This service is great but as it does not verify any data so you basically just download data via http and run it as your operating system. Just install a live system on your usb pen and use it or run a live system and setup the network boot environment.
http://grml.org for example can create a pxe boot environment from the live system, just run grml-terminalserver and it will start a dhcp/nfs/tftp server and provide all necessary data.
P.S: I am involved with grml so take it with a grain of salt
True. However, that should be a motivation to make that service more secure. But it does not make the idea flawed. It's very convenient to be able to boot any distribution just like that, without preparing USB sticks or CDs.
I guess it could be made pretty secure with good old code signing. Most distributions already sign their packages, but as this concerns the booting process it could be somewhat more difficult.
http://grml.org for example can create a pxe boot environment from the live system, just run grml-terminalserver and it will start a dhcp/nfs/tftp server and provide all necessary data.
P.S: I am involved with grml so take it with a grain of salt