As someone who has been working on their own hacky bash/qemu based fedora derivative appliance generator(viros.org) for years, I applaud what SuSE is doing here, though I see the following as problematic-
As a webservice instead of a local application, you do draw benefits, but I see scale as a problem. My non-mainstream opinion is that this kind of distro/appliance building/forking is something with a very wide appeal. I pursue the task, because I see what I'm aiming for, i.e. to abstract all modifications I make to a system I use or administer, into a set of modifications easily applied to the newest version of my distro, or another distro entirely. As a webservice requiring a VM per user, I see real scalability problems. Yet these scalability problems are solved if instead of a webservice, this is simply an app that comes with the OS, that users can run on their own system.
In any event, forgive me for this post, which is half a plug for my own project which is still after many years very alpha, and certainly for end users not in the same league as a polished project. I haven't been a SuSE user myself for many years, but I certainly do look forward to trying their solution out if and when they have it as a simple open source app that is part of opensuse. I'm really just an old-fogie who thinks that serious apps like word processors and appliance builders, work best on the local machine without requiring a connection to the internets.