[aus_]

This isn't actually too far fetched. IBM has a product called Rational Developer and Test Environment for System z[0] which allows you to run z/OS or any other s390 architecture in their hypervisor. Think of it as an enterprise version of Hercules that runs the latest version mainframe software. (Hercules can but licensing prevents this.) You could then essentially build a real "mainframe-as-a-service" (as you said) by deploying a Linux VM that has RDT installed and configured. Mainframe developers can spin up their VMs for on-demand dev and QA enivornments.

I know, because I am the system programmer who set this up internally at my company.

[0]: http://www-03.ibm.com/software/products/en/ratideveandtesten...

[bri3d]

I don't think IBM would license RDT for use as a mainframe-as-a-service, so Hercules would be just as illegal (and probably easier to set up).

[aus_]

You're right. They would never allow you to create a business out of offering mainframe-as-a-service. But internally, offering this service to your developers in a large enterprise is feasible.