This is essentially what these PaaS services do. Appfog for example gives you 2GB of ram to deploy your app with for free. You can deploy an app to 8 separate instances with 256MB of ram, or you can adjust it differently. With heroku you get 1 "dyno" for free, and for each additional dyno it's another charge, etc. etc. They do all the work of load balancing and making it "just work"
Would this solve that problem, by providing an essentially infinite sized machine?