If ISPs charge more for services, this opens up room for competition in the market to be able to provide favored services at a lower cost.
Example, if Company A charges more for HD streaming because it's not cost-effective for them, Company B comes along and offers that service for cheaper, and all of the customers who are dissatisfied with Company A move to Company B. Now in order to win the customers back, Company A must offer a more enticing service.
Basically, ISPs lose customers by blocking content because other companies will just offer it instead.
As far as bandwidth distribution, I don't see why a company like Netflix should be barred from paying a higher fee to ensure a great viewing experience for its customers. DeadlyStream has waaaay less traffic than Netflix, so this seems like common sense to me.