We would allow it, but you can't really upload so much on 300 MB of space. aldo is right - you would be much better off with a VPS or (even better!) a dedicated server. That way, you wouldn't run out of space so fast. Plus, a VPS provider or dedicated server provider would possibly (not guaranteed, though) work with you if illegal content was uploaded by one of your users. A shared hosting provider (including us) would probably just block your account.
You should look at
http://www.netfirms.com/max - they are one of the only companies that allows this on their shared hosting plans, and the link above is a good deal if you choose to go that route. Bear in mind they take swift action against illegal content.