You should take precautions to protect yourself, but not for the reasons or from the threat that you're imagining.
First of all, if you can't trust your hosting provider, get a new hosting provider. No more needs to be said about that.
Second, even though you think that the intellectual property in the web application you've built is valuable, chances are you're the only one. Would you steal your competitor's website? Probably not; it wouldn't be worth the trouble. As a rule, people aren't interested in stealing your site. Typically the cost of customizing someone else's site to fit your own needs approximates or exceeds the cost of building it yourself.
Finally, you should be worried about attackers retrieving your code and using that to attack you. Saved passwords, user databases, programming errors and vulnerabilities -- your code probably presents a juicy target for malicious attackers. This is particularly true if your code is poorly-written or your service is popular.
Obfuscating your code is not a solution, and wouldn't help anyway. But good security practices, including following the principle of least privilege, should help you. Segregate out your access so compromising one system or component doesn't give your attacker the whole app in a neat little bundle. The more independent and disconnected the elements of your business, the less an attacker can snag in a single go.