Why will it make worse customer service if a host offers multiple domains to resellers?
I think it will improve quality because with resellers customers get double customer support (first from the reseller they bought hosting, second if they cant help, the reseller send email to the host it self).
ASpnix Web Hosting has reseller plan for $19.95/mo for 3GB space, 150 GB traffic, HELM cp and SmarterMail. Check it out
http://www.aspnix.com