A half rack server in a basement isn’t going to consume a lot of power or generate that much noise. I have home servers and they are fine.

Data protection is an issue, but maybe this is something that SGX and family can provide eventually.

A scheme like this makes a lot of sense for distributed redundant backups.

The real problem is bandwidth. Most home users still don’t have decent symmetrical bandwidth. If you could solve this, then home servers could provide a handful of edge services to others in the area. I’m not sure where this makes sense versus local colo though.