Radius (actually RADIUS, it's an acronym) has been around for a very long time (years).
I believe it would handle the PPPoE request like any other PPP authentication / authorization (used to be all dial-up).
RADIUS can also authenticate against certificates, LDAP compliant databases (like MS AD, Novel NDS, Open LDAP, etc), Locally administered user names (in the RADIUS config file), MD5, MAC addresses, token cards, etc. It is also used for 802.1x, EAP, etc. for wireless authentication and authorization.
I use freeRADIUS at home for Auth/Auth on my wireless and AAA for my Cisco practice rack.
The idea is to have a single (cluster for large organizations) auth/auth source for the network remote access systems. From there it also was used for 802.1x (port-based authentication / authorization .... if you don't pass RADIUS, you don't get into the switch and beyond) and wireless (username/password, MD5, Certificates, EAP, EAP-TLS, etc).
FWIW
Scott