I say that having a self found league is a good idea. In fact when Blizz does do ladders I say that they should do them similar to Path of Exiles leagues. Where you would have different types of leagues. Then you could have an option to make a character that would belong to the self found league at character creation. Where the default character would be softcore. At the bottom of the character pages is a button that says league and will say softcore or normal by default. Then clicking the drop down menu you would see the option to choose self found league.
In that league you would not have access to any AH at all. It does not have to have a separate server to do it. Sorry if I cannot come up with all of the details on exactly how it will work.