You need monster amounts of traffic to make money with advertisement. It's hard even when you put ads on highly trafficked pages. Admin pages are used extremely rarely.
Hosting content is not cheap. Storage and bandwidth are still relatively expensive (check S3 prices). In order to make the economics work, you would have to have a large number of customers, showing ads on a large number of pages and at that scale you'll need many servers and lots of bandwidth and storage. It'll no longer be a one-man operation to take care of the sys admining, development and customer support.
At the same time you'll compete with companies like WordPress.com, posterous, tumbler, which are already titans in this market.
Outlook not good.
You should spend some time verifying your numbers i.e. spend time doing back-of-the-envelope calculations on how much page views you need to earn X dollars from AdSense, how much storage, bandwidth and servers will serving that many page views take, how many people will have to sign up for your service, what is your cost of acquiring customers etc.
It's clear that you can't provide such service for free based on ad revenue from admin pages, that are almost never looked at.
Most likely it won't work even if you plaster ads all over the sites you host, because you'll have customer acquisition costs and will not be competitive with other for-free established players (like the mentioned wordpress, posterous, tumbler), because they don't do ads.
Consider that this is a really old idea, successfully employed a decade ago by Geocities. The rule in such cases is that to be successful with such an idea, you need to be among the first and execute well. After that the market is extremely hard to get into.
When you face such conditions, your best hope is to offer a more specialized product. Tumbler is like blog hosting but focused on re-blogging other people's posts. Posterous is like blog hosting but they focused on making it as easy as possible to create the blog and post to it.
You have to come up with an idea that makes your product significantly different from existing products in a way that is useful for enough people to constitute a market.
Tto use economic speak: you have to come up with a way to segment a large, generic market into submarkets, for example blog hosting for toddlers (if only toddlers could type and had credit cards).
