Well to shed a little more light on the reasons why not, I can give you an example of a situation were it will work.
I work in a managed hosting company that has over 1000 customer servers, and about twice as many colo. We have a customer that has used one of his MINI computers for a stageed testing server on his network. He actually put it into a load balanced environment as a production server for a minor emergency. His advantage was, that his application would load into memory, and run from that. Since his X Serv box was the main headunit for his web application, the mini only addressed part of his application that was not hard disk intensive
Reasons why a Mini is considered a bad idea
1. Drives & speed.
The speed of drives in a server is much more important on a server then it is on a personal desktop. The slower drive speed of a Mini should be fine if you are serving 4 to 5 low demand workstations, and or customers. If the application you are serving is disk intensive, your Mini will not be able to keep up with demand as well.
The smaller the drive, the more fragile it becomes, and the more prone it is to failure in some cases. There are production small form factor drives in testing by many companies, but they are not out yet (from what I understand) and the drives in the Mini are not of this class. The small form factor of the mini does not offer you to run any type of RAID configuration, without using external drives.
I suppose you could run firewire RAID drives, but you would almost want FW 800 to give the server more of an edge and reduce slowness experienced by the workstations you are serving. If the Mini supported Firewire 800 (I have no idea if it does), you could have some verry fast external drives, however by the time you buy them, the cost of your mini is approaching the cost of a single processor Powermac
2. Memory
While 1gb sounds like a good number, most current day servers have and run atleast 2gb. The OS isn't the main reason for this, Serving workstations, or web users requires lots of memory. And in most cases, the apliccation being served takes up memory itself.
Those are the main reasons for not putting a Mini into production as a server. There are others that make it less attractive as a porduction server, but they are more trivial sounding, and it would have to depend on the indended use. I love and want a Mini, but with my experiences, i would seek out a used powoermac over a mini, for a Macintosh Hardware option as a production server.
