He's actually correct, and that's why you can't copy a key file to another machine. It keeps people from just stealing your key. You need to physically enter it on every machine you are going to run a copy of Blockland on. However, one key could host an unlimited number of servers, so he could just have one copy of Blockland on the server that only he knew the key to. Managing auto-admin lists, etc, for each server would require some special script I imagine, if it's even possible.
If you're not comfortable entering your own key into a server someone else owns then shared dedicated hosting probably isn't for you though.