Technically, unless your cable provider is blocking access to the ports that you want to serve (probably 80 and 443 for http/https respectively) then there's nothing stopping you from hosting your own . Seth said as much.
As pretty much everyone else said, it's a bad idea.
So what would it take to make it a good idea?
Well, first, know that you're never going to get as fault tolerant as the expensive colocation facilities. That's why they're expensive. They have things like redundant power sources, redundant generators, redundant network connection, redundant everything. You can't afford this.
Instead, a close approximation might be...
A home with a section of the basement dedicated to the servers. Get a cheap four post rack, and buy rack mount servers. You can buy 2nd hand or from cheaper places like Supermicro, etc
Get a decent quality UPS, and make sure it's enough to power the servers and network equipment for 15 minutes or so.
Get a leased line for bandwidth. This is the expensive part. A cable modem that gets you 10Mb/s down and 2Mb/s up might cost $50 a month. A T1 that gives you 1.5Mb/s down and 1.5Mb/s up will probably run you $700 a month, if you can find a provider who will install it in your house. Depending on the area, you might be able to find metro ethernet for $1500 that gives you 10Mb/s both directions.
Buy environmental sensors to track the temperature and humidity of the area around your servers. Homes aren't meant for this sort of thing, so you have things like waterlines above servers that can break and dryer vents which cause moisture and heat. Sensors will help you maintain a good working environment.
Get insurance. The kind of insurance will depend on if it's a business. Here's a hint: create a business.
- It's all tax deductible
- You can deduct part of your mortgage/rent from your corporate taxes
The down side? To deduct it from your tax, you've got to make that much first.
Until you have a business, and your business insurance covers it, make sure your home/rental insurance covers them.