Living in Australia, I can tell you the main reason caching is so important is because our main telco decided to charge by megabytes of usage. Back in the days

Living in Australia, I can tell you the main reason caching is so important is because our main telco decided to charge by megabytes of usage. Back in the days when most of us were stuck on dialup, they were charging $0.18 a megabyte. At least the slow speeds limited the damage, though downloading a 600MB would still have cost a ridiculous $108. Meanwhile the rest of the world hadn't even though of charing such tariffs for internet usage. Of course once you have one company setting the standard then their competitors all follow suite. While things have improved tremendously since then, broadband plans are still based around download and sometimes even upload usage. At least now you're looking at something more reasonable like $50/month for 50 gigabytes a month of included download usage. So originally caching would actually save you serious money (unfortunately ISPs rarely passed on these savings to customers if they used their proxy server). Though nowadays it's less important as long as the websites you visit are responsive. Granted you're always going to have some kind of client side cache.