Interesting idea. Instead of a VM though, what about a small, low-power box that you plug into your home network that handles secure communication transparently to the user? I'm thinking something like AdTrap (http://www.kickstarter.com/projects/600284081/adtrap-the-int...) but for email or other sorts of communication.
Why the need to sell hardware? I can accomplish what AdTrap does using a USB stick or SD card and any old i386 hardware I might have lying around. You might call this a "System on a Stick". It boots from the USB/SD media and runs in RAM (no hard disk is needed). You set your other devices (running your favorite graphical OS's) to use it as a gateway/router.
It can block ads. Easily. I do this via DNS and it works like a charm.
But that is only one of many things it can do. Could it establish secure end-to-end connections with other people running the same System? Of course. Could you form your own overlay networks? Yes. Could you run email on top of these overlays? Yes, you could. In fact, you could run almost any program over these networks that you could run on a LAN.
This has all been possible for many years. More than a few people know how to implement it.
Whether there is consumer demand (cf. enterprise demand) for this solution is an open question. At least, so I thought.
There are certain advantages to custom hardware. For example, the OS could be flashed onto a tamper-resistant ROM to prevent it from being surreptitiously altered. The device could include a smart card slot used on boot to decrypt the storage mechanism. And the device itself could be very small, light, low-power, and fanless, perfect for stashing out of the way next to your modem.
There's also advantage in offering up a single appliance for people that don't have the technical expertise to set up the necessary services on their own, who don't have a spare i386 they can use, or even people who just want something to work without spending too much time on it.
Secure communication requires parties on both sides to be capable of it, and it stands to reason that more people would buy into a system that provides the capability if you make it really easy to use. Of course, the communication network itself should be fully interoperable with whatever hardware you want to use to connect to it.
All good points, none with which I would disagree.
The System on a Stick could only be surreptitiously altered by remounting the root device as read-write. This is difficult for any non-technical user to do without instructions.
The System on a Stick is fully preconfigured. Insert Stick, turn on computer and away you go. It is every bit as easy as a new piece of hardware with its OS and configurations flashed on ROM.
I do not see a small, low power, fanless device as being incompatible with a System on a Stick. Plug computers or credit card sized computers should have slots for USB sticks, SD cards or CF cards. And they should be able to boot from them (no on-disk bootloader needed).
Not every consumer may be ready to make a purchase of new hardware. Evidence of this is the fact there are a suprising large number of people still using what we would consider "old" hardware. Desktop PC's in fact. Regardless of a consumer's appetite and budget for new gadgets, certainly they can afford a USB stick, SD card or a CF card. They probably own one already. They might even have a CF card left over from the days when digital cameras used CF cards. The System on a Stick will fit on a 16MB card.
I would imagine most people indeed currently have some i386 hardware, either a PC or a laptop. Thus they have what they need to try out the System _right now_, without making a new hardware purchase. When they eventually make their next hardware purchase (maybe an ARM tablet), they will then have spare i386 hardware.
As the System can run without touching the disk, there is no install anything. It can be used on i386 with OSX or Windows installed without affecting those systems. A user can perform tests of end-to-end connectivity and communications using any smartphone with a web browser.
I like the sound the AdTrap Kickstarter project. An additonal computer ("router") that sits between the user and her modem is I believe the right way forward for solving problems of privacy (e.g. blocking ads) and security (e.g. secure communications), not to mention other increased functionality. I simply wanted to point out that purchasing new hardware is not necessary to get started.
Whatever shape or form that router takes, I think it must be bootable from external media with the bootloader of the user's choosing. Any less means we are purchasing yet another closed system and putting someone else in control. By all means make this router function without any user input (turn it on and you're done). But by no means should the ability of the (more conscious) user to fully control the router be limited. That means open source OS and open source bootloader.