If you are providing hosting also, have failed to collect and are writing the debt off, I think it would be MUCH better to disable DNS or the host or something like that, rather than put up a public page like this. I'm a developer, not a lawyer though. If your lawyer tells you it's acceptable to do something like this, then I wish you all the best. Personally, I'd just take the site down and file a lawsuit, even a small claims suit.
No its not ... every business I know ceases to provide you business after a certain number of days of non-payment ... Cable companies turn off your cable, electric companies turn off your light, Your landlord evicts you etc etc.
If you're paying for hosting ... as long as I have your data backed up, I'm pretty sure I can stop hosting your site by removing your dns records from my system
