Earlier quoted context omitted.
Most other utilities charge based on how much you consume.
Most other utilities have cost structures that scale with actual consumption rather than capacity. If you use more water, even if there is plenty of delivery capacity, they could literally run out of it. There is only so much in the reservoir. If you use more electricity, even if there is plenty of transmission capacity, they have to burn more fuel to generate it. Transferring more bits doesn't risk depleting the sup…
Legitimacy or lack thereof is irrelevant when setting prices.