What about all of the customers not downloading that data, should they also pay for these upgrades?

If I were a network operator and traffic from one of my peers from one specific source was saturating my connection, I would deprioritize that traffic.

Were the peering points congested in both directions, or just ingress to Comcast's network?

I agree, the companies providing transit to Netflix and other streaming providers should pay for the bandwidth being used by their customers.

Actually Netflix benefits by passing the costs to ALL Comcast customers and not just the ones who use their service.

If I were TW, I'd refuse too. Why do I have to allocate space in my datacenters for free for someone who is not a customer of mine?

I'm assuming Netflix doesn't buy transit from TW based on this:
http://bgp.he.net/AS2906

Now that Level 3 owns TW, this might change.

No, it's called one side abusing it's peer link.

Perhaps they originate traffic for certain user agents or devices on different subnets that are associated with different peers.

Agreed, and that's the worst thing about this - that I have to side with Comcast and support their position.

If the traffic was heavily tilted from Cogent to Comcast, it's not Comcast's responsibility to upgrade without charging more. If they demand paid transit, people will still complain about toll roads and "paid priority" while Comcast has to babysit the two connections and deal with billing disputes based on what amounts to overflow charges.

Perhaps Netflix wore out their welcome and Comcast no longer wanted to give them special treatment or allow anything beyond paid transit or eating the bottlenecks.

If they moved the traffic to paid transit, we'd hear the same things about toll roads and priority and everything else.

Netflix can't get away with the modern day "babe in the woods" game. They knew exactly what they were doing when they selected their transit provider.

Why should ISP/last mile providers have to absorb or pass along the costs of upgrading their networks to satisfy the demands of the paying customer of another ISP?

Essentially all customers at ISPs must subsidize the desires of the customers who like to access streaming providers.

Netflix and others who operate like this are the bad guys and they full well know it.

Why should all customers of an ISP pay so that some users can have a better experience?

If Netflix (and other content providers) wants this kind of access to an ISPs customers, they can do the responsible thing and pay for transit directly from them.

Yes, it's Comcast's fault that their peer was sending massive amounts of traffic in their direction in what is usually viewed as an abuse of unpaid peering links.