The problem is that in most servers, the admins are going to greatly prefer working with the distribution folks to ensure everything is properly maintained and secure. Consequently there is a huge bias towards what is on the repos, and a huge bias against installing more than you have to from external sources. This is one reason we are working in getting into repos (we will be in Ubuntu and are already in Debian Testing btw).
So no, that doesn't work. What does work and keeps our customers happy is making sure that what we have works with what versions they get from their vendors.
TeX is not just for desktops. It is a wonderful part of an automatic document generation system.
In case you are wondering what we are doing, the project is LedgerSMB (http://www.ledgersmb.org) and we use TeXLive mostly for generating PDF invoices, purchase orders, etc, along with Perl modules like Template::Plugin::Latex (unfortunately XeTeX requires hacking some of our dependencies currently :-( but that's not the TeXLive folks' fault!)
Anyway I think we are still supporting TexLive 2007.....