We seem to be needing more concerted action on what is a consumer minimum standard for an internet connected device. Consumer devices have to be more secure because if the low user skill level - and interest. I am always reluctant to say "there should be a law against it" but frankly if we cannot mandate minimum standards of uogradbility and security for devices we will just keep handing over our devices to the first…
Or you need to make it easier for the 'black hole' solution to be pushed further and further back to the sources of the bad traffic. A remote site shouldn't be able to get you banned from the Internet (by it's self); but it MUST be able to say, "This host is being abusive, restrain them from sending me data". ISPs SHOULD use that information to evaluate if a host from their network might be compromised or otherwise a…
Okay, if I'm going to be liable, financially or otherwise, well, then we're gonna have to make some changes around here.
First off, I'm going to have to heavily filter and restrict what traffic you can send out to the Internet. What isn't filtered or restricted is going to have to be inspected, logged, and retained for a period of time.
Next, because I can't be certain that you're RFC3514 compliant and that at least some of the bits you're sending aren't malicious, I'm going to have to prevent you from sending out any encrypted traffic. Instead of allowing you to use any DNS servers you want, you're going to have to use mine (DNS is heavily abused for DDoS attacks). Outgoing e-mail will be automatically redirected to my internal smart host (STARTTLS will be blocked, by the way) and I'm gonna have to log, read, and retain it all. HTTP traffic will be transparently proxied and all requests and responses will be logged and retained.
That's just the beginning. Are you sure this is what you prefer as your "solution"?
As a network operator, I believe that your ISP should be nothing more than a dumb pipe and allow the bits that you send to pass through freely. As an ISP customer, that's how I want my ISP to act. (If something gets reported or I "notice" you for some reason then, sure, I'll look into it. Otherwise, I try to fuck with my customer's traffic as little as possible.)
I'll agree that there is certainly a problem, but it is not because of ISPs.