I don't think you really understand the point. If you have traffic coming from another network, to your network or through it, and it is taking up more bandwidth than you can provide to the users in your network, it is a problem. This is typically a peering problem, I mentioned that. The problem gets extended to the user and to Netflix when there is a disagreement in the peering payment and the providing of more service. The bandwidth is saturated, the users now don't have enough bandwidth to get to Netflix or other services, the network can't or won't upgrade until the other side of the peering pays up.
In this situation to guarantee they can deliver service to Netflix for their customers, or even to customers of the other network, they give Netflix some options. That money they charge is then used to fulfill one or more of those options. The things you are saying have nothing to do with what I am saying.
But not everything should have to be peered to allow traffic to an IP. That isn't how the internet works. You don't need a direct peer to every single IP network in the world. There is a thing called routing that handles that. Lets forget about a single name as you are getting hung up on a single customer. They didn't JUST do this for Netflix but did it for Netflix, Facebook, YouTube, and gaming servers.... So just look at generic company X. If generic company X pays for service with their ISP. Anything that happens with that ISP is up to that ISP to handle. If they need to upgrade trunks to other carriers that is what their customers are paying for already. I pass traffic through my network for cell towers, when my backhaul gets to 70% of its capacity I will upgrade it. It really isn't that hard. I am getting paid to provide a certain level of service. The fact that I oversubscribe my network is not the fault of the customer, that is my problem to resolve since I am getting paid by my customers for them to have a certain level of service and choice to spend less money for awhile to make more profit for as long as I can to then make better use of the money later by buying more equipment. If peering needs to happen with another ISP, that is between the ISPs not whatever customer might be paying that ISP for service. If I connect to comcast and my trunk between me and comcast is getting maxed out then I need to deal with comcast to fix that, I don't need to go find 20 random comcast customers that my customers are accessing the IPs of and turn block those IPs unless those companies pay me $1 million a month. If I connect to level 3 and that trunk is maxed out then I need to get a bigger trunk to them.
Same here, a trunk between Netflix's ISP or any other companies ISP and a local ISP is up to those two companies. IF a peering agreement exist between the larger company and the local one directly then at that time you work on the terms of that peering agreement. But when comcast makes Kyle pay $25 for every comcast customer that access hardocp because his servers are using bits on his network with no peering between them existing or possible that is not anything that you are trying to argue.