It wouldn't be that hard to do.
It would be for me: as I mentioned in my original post, there's no way I could make a board with the Wiznet chip. Living in the hinterlands, I probably couldn't even find someone local to do the assembly.
If I used a module like the WIZ811MJ so I could do through-hole, it would take the parts cost up to that $35 range.
But the WIZWEB module is only $32, with 640K of flash, 36K of RAM, and more I/O. Plus it has the W5300 Ethernet chip, which eliminates the SPI bottleneck. The ATMega128 supposedly has support in Wiring, so turning it into an Arduino platform should require only a little more than modifying the Ethernet library to support the 5300.
The only downsides I see are the double-row headers (a modest increase in the difficulty of incorporating it into projects) and the requirement for an external 3.3V regulated supply. Some people might see the lack of a USB interface as a problem, but it seems to me that you're rarely going to need one for projects that use Ethernet.
I've been wishing for an Ethernet Arduino for a while, but I think the Wizweb makes more sense. If you want shield compatibility, just make a simple through-hole "carrier" board with a voltage regulator and shield headers. It'd almost certainly be both cheaper and more powerful.