/cough world of warcraftQuote:
When you first think of it it sounds like a good idea but in practice it simply wouldn't work.
Sure, if you had a server worth subscribing to you would be able to attract some people but it simply wouldn't be enough to maintain an active server (say... 50 subscriptions?... server would get boring FAST with that few players)
Hell, even commercial mmo's are moving towards micro trasactions. You simply can't justify charging a monthly fee for most mmos any more if you want to get a decent player base.
That being said... there is no excuse to not run a proper ingame economy or to allow for donator over powering.
Personally I plan to have a fairly regulated and balanced economy on my server and do fund raising through other means such as selling vip levels (basically subscriber BENEFITS) or possibly through selling HmPoints (usable to start server events or other things that change the entire server, not just your own character... IE: guild halls)
@OP: as for a p2p system, give access to maps that have low spawn rates, terrible drop rates, etc, for free players, and people who are flagged as paying get access to better areas. That means free can still "play", even if it is more difficult, but paying get a noticeable advantage without being super OP. You can implement that sort of system in many things, but remember not to make it incredibly unfair because there will be plenty of people who will just refuse to play and a bad system will just get you less players in the end.
Also, as far as hosting goes, you should first look at alternatives to getting your server running for free rather than jump right into paying a chunk every month and hoping people can support it. Chances are, you will not get a ton of paying people right away. (by alternatives, I don't mean terrible home internet connections)