I'd guess the exact legality varies state to state. Practically speaking you just need an address. Most registration procedures can be done remotely, but one big potential annoyance is getting things notarized as this is often quite expensive at US embassies.
I just checked out tarsnap. It's $0.30/gb/month. I currently do a backup to S3 which is a fraction of the price. I wouldn't mind having another cloud service. Why did you choose tarsnap if it's so expensive.
It's awesome that you've tested Checkout and are confident that it helps conversion. Would you guys consider releasing the experiments that your ran? I think it'd be a great lesson in testing out products pre-launch.
As another American, I completely agree that this is wonderful. We both like this behavior because it's in accordance with our culture and values. But the example of Asian culture that you bring up is interesting.
Japan (and to some extent China) are undeniably successful countries/cultures. Yet I'd guess that if a student acted this way there, he or she wouldn't be able to find a job. How do we know that having undue respect for hierarchy is objectively a bad thing?
Yahoo should be desperate. After fading into irrelevance for the past decade they need to make unusual/risky decisions to have any hope of turning that around.