It would also work over NFS, which could have value. My interest is actually in the opposite direction; I want a single machine with all home directories on it

It would also work over NFS, which could have value. My interest is actually in the opposite direction; I want a single machine with all home directories on its own internal hard disk, but where each user encrypts their home directory separately. That's doable other ways, but homed could be a nice way to do it that works out of the box.