Suggestion ...
When you register a domain, the script ask you where you want this new domain to point .. What about making a new feature like Create new x MB Free Domain, let's give the visitors the option to create a free site on the domain, allowing them to choose between direction or sub-domain ?
If they choose sub domain, the script would once approved create a folder in a specified directory set by the add domain option like ex. "users/" and copy index.html from "/newuserfiles" so every given sub-domain gets the welcome files. It may be much work but I'm sure it's a good idea ..
If you don't want to code it for the system, please tell me and I'll gladly pay ...