Can Xtext LSP server by used as dls as a service? Where all files are stored on server (remote location) and handle multiple connections from different clients in the same time?
If yes any suggestions how to implement this will be very much appreciated.
The basic assumption of the Language Server Protocol is that both the client and the server have access to the same set of files. Therefore LSP is not designed to work in a real client-server scenario. The serving of files to clients would have to be implemented with a separate service, or as an extension of LSP.
If you're looking for a web client solution, you could have a look at Monaco editor. It could be a good basis for implementing such a file service.