I don't think it would be much uses as a web-server, but it's probably possible. I think however you would have a hard time getting a data center to mount one in their racks..
I've seen a few articles where people had linked together the older style X-boxes to make poor boys supper computers. I think it was Wired magazine had an article about scientist's actually playing around with linking 10-15 of the older X-boxes together.
Of course you would have to get some sore of Linux OS or windows OS to boot on it first.
http://www.llamma.com/xbox/beowulf.htm
http://www2.cs.uh.edu/~bguillot/xbox/home.html
using the play station
http://www.xboxsolution.com/article810.html