Right now the only part of my library that I'm interested in sharing, that is legal, is my family photos. I know there are a lot of other sites out there to do this now, but the problem with those sites is the lack of syncing with MC (tags, new photos, etc). If an MC centric side provided a good way to share my photo library such that it stays in sync with the web site (and allows tagging, commenting, etc on the web) that would be very nice.
One thing to keep in mind is that, at least for me, I'd want to share all my photos. That's something like 6000 so far, and growing. The service would be a lot less interesting if it was cost prohibitive for me to do that. Also, one other reason I'm seriously considering using some other photo sharing site is to be able to have a complete off-site backup of my photos. That means that the web versions would have to be in the original format and not downscaled or compressed. That means for you that you'd need a lot of storage.
One way to help pay for it all would be to have relationships with printing companies (photos, mugs, mouse pads, etc) that gives you a percentage.