I find it hilarious that this thread has descended from the OP asking a question to having to defend his views against very unhelpful posts.
I agree with Valkrider, I don't know of any sites that offer this service, you seem to know a lot about it yourself and DIY is a good and cheap option If you have any coding experience.
On the other hand don't dismiss Dropbox on the basis that you have to download books to read them. Even when using a browser it caches the book, ie. stores it temporarily on your device but so that only the browser can access it. This would mean it will automatically delete the book when you are done with it, but also that you could loose it if it clears the cache and you find yourself without access(which seems to be the crux of this discussion
If you use Dropbox you get the benefit of uploading any books, organising them in folders and you get to use a dedicated reader software of your choice(I'm sure using a web-reader in a browser would mean losing a lot of screen real estate to unnecessary tabs and option bars). Also its free
. Then you can free up space manually whenever you need it, as having a permanently empty device isn't much use either, so when you have no films, music etc on it you can have more books.