Am I correct in thinking that if I hook my asterisk server into a t1 with correct configuration that I become my own phone service provider?
You become the owner of a PBX connected to a T1 line, Like millions of other PBX owners arround the world.
but if you want to think big, you can try to get someone to pay you as a VoIP subscriber who can send/receive calls to PSTN. You can get a big block of DIDs, and assign one to each of your customers. I’d think pretty hard about why your service is better than Vonage, Broadvoice, Voicepulse, etc. before heading down this path.