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I fully agree if the user is distributing the software, they should be nuked, but I'd love to see the AUP/ToS for any ISP that dictated what software you could or could not run on your own machine.
If anyone actually read the documents (and does anyone still read EULAs, AUPs, and other such cruft?), they'd run so fast the ISP wouldn't see them go.
ISPs are responsible for, and thus should worry about, what their customers do WITH THE SERVICE THEY PROVIDE. That does not apply in your pot smoking example, or in the example given in the parent article.