Northwind Hosting exists, it's better than what you saw and it's called SaaSGrid
What is SaaSGrid? In their own words:
If you're building an on-demand business application, using SaaSGrid as your foundation will help you build quickly and inexpensively, ensuring that your customers can access your application's value sooner rather than later. Furthermore, you’ll then be able to deploy your SaaSGrid application to SaaSGrid itself, which provides a safe and robust virtual application container and hosting environment for your delivery needs. SaaSGrid's comprehensiveness ensures that your business and revenue approach will be able to flex and grow with changing market demands.
Sinclair walked me through the whole experience of building an app, on-boarding it, deploying it in different environments and then consuming it.
SaaSGrid has some very nice properties for ISVs. Besides the whole value proposition of hosting the app, SaaSGrid offers higher value services such as application lifecycle management, billing and metering, tenant management, etc. All of this without requiring you to learn a new programming language, paradigm and/or platform: everything is based on standard .NET so if you are familiar, skilled and trained on the standard Microsoft platform, leveraging SaaSGrid should really be very easy. Furthermore, you retain the freedom to deploy your app in other ways: on-premises, on-demand, etc.
This "non-intrusiveness" of SaaSGrid is a property of PaaS offerings we have studied in the past. I personally believe that all offerings requiring an ISV to re-write an app, or re-learn a whole new development paradigm (custom language, non-mainstream storage, etc) will be at a disadvantage compared to PaaS offerings that will make the most of your existing investments and strengths, and therefore adoption will be hurt (probability +80% :-)).
Last year we developed and wrote "Northwind Hosting concept demo" with the intent of elevating concepts we believed were important in PaaS offerings. We also wrote a couple of white papers describing this topic (e.g. ISVs are from Mars, Hosters are from Venus; Efficient Software Delivery Through Service Delivery Platforms).
Many concepts discussed there are now implemented for real in SaaSGrid, but I also saw lots of new innovative features which I found extremely useful.
Last, having an idea is great, but cheap :-). Writing about an idea takes some non-trivial effort (it is non-trivial for me at least). Turning an idea into a real offering is very hard. So kudos to Sinclair and his team for their hard work.