I don’t know the details of the implementation. It’s not even implemented yet AFAIK. I guess if it can run a supported hypervisor via network, it should work?
I don’t see what’s wrong with an isolated, remote or local device under control of a chosen dom0. It further expands the Qubes approach of compartmentalization. For example, if another device runs a different CPU architecture, it may not be vulnerable to the same attacks (e.g. Spectre/Meltdown).
See also: Qubes-Air? Qubes in the cloud?.
Yes. Also, Qubes further compartmentalizes the system by separating dom0 into sys-gui, admin VM, sys-audio. At the end we can expect that dom0 will run something super-minimal. Also, dom0 is the term coming from Xen and it will not be appropriate anymore in a distributed system.