Concerning an automatic website creation from the front-end with subdirectories or subdomains, this is possible.
An automatic subdomain HTTP Server configuration is possible.
We already did that for cPanel.
This require a VPS or dedicated server.
See for example our
www.mywebsite2win.com that is doing that.
If you want also propose the automatic setup of your server with a domain name, this is not available and must be developed in specific and depend on each specific HTTP Server administration tool.