I think people saying generic shared hosting is highly competitive and people are unlike to switch are right. However, there are niches.
I think there are niches. Not saying any of these are what you should do, but they are examples of the sort of thing you should brainstorm for.
- I used to use a Python and Django specialist host for Django sites for myself and clients. You are not competing with the mass of PHP + MySQL sites. Can you do a good job in some niche?
- Margins in managed hosting are good and most hosts offering do a cookie-cutter job. maybe doing it properly is an opportunity? That said, it might not be so profitable when you take into account the time taken to do a good job. Also, even with this, target a particular stack.
- All the above is particularly true of managed VPS hosting
- Although I have moved most things to VPSs and a dedicated server, I still have sites on one shared host, Nearly Free Speech. They are cheap for small sites because they are pay as you go, and their system scales well for big ones as its distributed - they were doing cloud hosting before it was called cloud. They also support a lot of different languages and have a lot of custom systems. They use FreeBSD.
Some of the above are similar to your "custom management" idea, but I think you should target users of a particular stack unless you can think of another niche.