We have done this here. We wrote our first one over 10 years ago. We then upgraded it to use web services, more as a way to learn the technology. The main reason we did this originally was that we wanted a bug tracking system that also produced version history reports and a few other features that we could not find in commercial products.
We are now looking at bug tracking systems again and are seriously considering migrating to Mantis and using Mantis Connect to add additional custom features of our own. The amount of effort in rolling our own system is just too great.
I guess we should also be looking at FogBugz :-)
