To try and troubleshoot my error I forked your repo, and added an example application:
https://github.com/wirelessdreamer/cordova-cameraserver
after installing it to a galaxy s5 and starting the server, I don't see the preview image. I assume i'm missing something simple, and shouldn't be seeing a 500.
Here is the console output from the sample app:
clicked start
controllers.js:96 CameraServer Started: http://127.0.0.1:8080
http://127.0.0.1:8080/live.jpg Failed to load resource: the server responded with a status of 500 (Internal Server Error)
Once this is resolved, if your interested in adding the example app I can send a pull request.