I've looked into dedicated hosting services in the past as I was interested in such a thing. It seemed like many services (those that tailor specifically to low latency game servers) aren't interested in hosting small-time indie games like Blockland.
Your specific idea does not appeal to me, however. I'd rather not donate money to pay for awful DMs, fort wars, and a bunch of custom add_ons. A better idea would be to pay for a single physical server, and run multiple BL servers off it. All you do then is divide the cost of the server between the number of BL servers being hosted and those that donate end up paying a certain amount per month for their own personal server running whatever add_ons and game modes they like.
There are other issues too. Where would this server be located? It isn't really fair to host it in England/Europe if you want American players to participate. Also there is the issue of who has what rights/privileges over the server and its operation.
It's a cool idea, but it requires a little more thought and explanation than what has been provided thus far.
Hetzner is in Germany, but honestly, you all need to man the forget up if it even bothers you. Blockland plays smoothly up to over a thousand ping, there's just a minor delay but it doesn't jerk back and forth like Source games do. In fact, there is a grand total of
*LE GASP* 0 servers up right now that I have less than 300 ping to for Blockland, and that doesn't bother me in the slightest.
Americans would get, what, 100 ping or so instead of 40-50? Big whoop. It's not going to affect a thing.
Plus, it's not really fair to host it in America if you want English/European players to participate, by your logic. You can't please everyone, so it'd be best to go with the best hosting deal rather than trying.
Also, you could easily run several servers off that machine - not only Blockland but other games, as you say. And if I had the cash right now I'd happily contribute to running it. (Actually, if I had the cash right now, I'd have one to myself and be running a multiple-server RPG using one server for each major zone)