When linux 2.4.x was stable, livecd took over because its fast, using only ramdisk as operating system. Then Linux 2.6.x was added to 2.4.x base. 2.6.x under livecd is really the answer to server operating system. All server software should be in the livecd with 2.6.x package. You need huge flash memory to do randisk operating system with USB flash drives. Perhaps 127 of 2gb cards. Which will use 256 mb for the ramdisk operating system but the rest for database to run the server application.
If your server website requires bandwidth, then you have to have USB broadband channels upto 127 of T41 or T4 or T1 facilities. And use 3 gb of dram for database storage, using livecd ramdisk operating system.
Hardware does not really need ATA, PCI, etc. With all that backbone, Linux 2.8.x posix system will have much parallel data transfer capability using upto 750,000 threads in each 1gb memory card.
It is a preview of interest concept for a future Linux architecture.