Why would we want to distribute hosting? And for that matter, what's wrong with advertising, provided it's done as subtly as possible, and not from various merchants of death ;-) (which I still think is for Bomis to decide -- I may feel very proprietary about a lot of stuff here, but I still remember I'm on somebody else's playground. Jimbo et al. have been very cool about trying to get input, but business decisions should belong to them)
It's a matter of scaling. Hosting is currently the only bottleneck in the wikipedia process, other than possible problems in organization of material. If the popularity of Wikipedia doubles, the hosting needs to double--with distributed hosting, that would happen automatically.
-tc