Yep. Running servers is against Verizon's residential ToS. Regardless of how much BW the guy is using, he's breaking the rules.
Another misleading Slashdot title. This is fairly run of the mill for residential ISP service. I bet it was a short conversation! They called him to try to find out if he was doing anything against their ToS, because of his bandwidth usage, and he flat out admitted it.
If he had answered "Netflix" (and that was believable), would the conversation have gone differently? Hard to say, because that conversation didn't even happen.