Is it possible to (legally) sell WP7 apps outside of Microsoft\'s App Hub? Are there license restrictions to this? Is it ideal to even approach app distribution in such a manner
No, the App Hub is the only place you can sell your WP7 apps.
From a developer end I don't think I would want to distribute outside the marketplace.
Microsoft has taken steps to protect the developer’s intellectual property and the prevention of app leak prevention.
Windows Phone 7 App Protection white paper. link text
Strictly speaking, I'm not aware of any restrictions in place to prevent exchange (commercial or otherwise) of xap files outside of the marketplace.
However, to deploy the xap files the would be users would have to have an active marketplace account. Even then, you're limited to 10 apps deployed not via the marketplace.
These points would make it impractical to reach a broader audience than developers outside of the marketplace.
There are no sites specialising in this. Perhaps as a result of it being not an ideal/worthwhile scenario.