I take it you want users from the public end of the website to be able to create their own blogs? If so, this is certainly possible.

You'd first want to create some sort of form that asks the user what they want their blog to be called, etc. in your form handle function use the data they entered to create a new blog holder. if you check out the function requireDefaultRecords() in BlogHolder.php you'll see it makes a default blog holder when you first install the module. That should help get you started with creating blog holders outside of the CMS.