I assume that's how Starcraft 2 and Halo3 does it(last online games I've played). But doesn't this mean it would have to run an instance of ever game being played on the masterserver? Because after matchmaking, it can't just select someone to be the server unless their ports are opened.

I have to imagine that having master-servers would cost a pretty penny for indie developers like myself. I think the best option for indies would be to implement dedicated server support that just rotates levels to provide an extra layer of consistent games in the database for those who don't want to open ports often. This is how TF2 probably does it, you just join a server that's always online in a level with no lobbies...