This is a very thought provoking piece I think (Note, it's from BBC future so will need a proxy server if accessing from the UK).

http://www.bbc.com/future/story/20131201-how-to-set-up-home-in-space

Interesting piece but there are still a lot of technologies that need developing before anything like this can be attempted.

Space mining and manufacture being just two very important ones. There's no way we could send huge amounts of materiel up. But mining and smelting and using it there and sending stuff down is feasible.

Radiation shielding is another technology we could do with. Fuel collection and manufacture. Biological technologies to combat bone loss and muscle wastage...

The list goes on. But we are entering the age of commercialisation of space, so never say never.

To be fair most of the tech is avialable now, what it needs is commercial manufacturing to be able to bring costs down to make it viable (like SpaceX are doing with launch costs).

Lets face it, sci-fi books have been predicting this type of habitation for decades, it's possible if the will (and the money) are there to follow up on it.