c# - Create dynamic installer package on server

Question

First of all what the installer should do:

1. Check if .NET 4.0 is a requirement
2. Unpack files
3. Generate configuration for specified user
4. Install windows service
5. Start windows service

The only problem which I have is "3" (Generate configuration for specified user).

I found following solution:

1. Create setup project
2. "Decompile" msi using MSI2XML and create "template" from decompiled installer
3. When user try to download installer on my site use XML2MSI to build installer package from "template"

The server-side technlogy is ASP.NET MVC (but MVC in this case probably does not matter), also I hosting my project on Azure (this is probably much bigger problem).

So my questions are:

1. Can I do this in above way?
2. Is there a better solution?
3. Should I use WiX instead of setup project (2012 does not support setup project)?