Even if you could have a very smart network where only users within the same ISP exchange data (this not incurring peering fees), all that data still needs to b

Even if you could have a very smart network where only users within the same ISP exchange data (this not incurring peering fees), all that data still needs to be routed and transported between the ISP's access points, a cost that scales up with usage. If all users started using all of their bandwidth (or a larger portion of it than they do now), costs for the ISP would go up, and they would have to pass that on to the users. Earning $5 per month from reselling bandwidth is not so attractive when it means your ISP bill goes up $20. The business plan does not account for this. It assumes bandwidth to cost the users nothing, which only is true now because of flat fees, which are only viable when users use a very limited portion of the total available bandwidth.