What I like about having the application on my own server is the following:
Only I have access to the database (private information is secured - sort of).
I'm responsible for my own back-ups.
I have access to the administration section to create e-mails and work in the application (make updates).
It is VERY easy to use and run and uses little bandwidth and little space.
So I'm not certain that you would find users interested. With that said, there may be a demand from businesses that don't wnat to handle the list or create the e-mail marketing pieces so you can roll that up into a business model.
Steve