why not have "bob" make a directory in the /home/bob/ called "public_html" that is 777 (world everything)
That is how apache handles user accounts, instead of sharing the Docroot with everyone. You will have to navigate to say
http://yourdomain.com/~bob, but in the apache config file you can set the alias to .com/bob, and all he has to do is put an index.html file in there, and he's got his own webspace.