You are mixing apples and oranges.
Peering agreements have been the same forever. As long as there is nearly a 1:1 ratio between the providers, everything is fine. The issue comes up when one side is using more bandwidth than they are giving in return.
Not entirely true. I remember reading an article years and years ago that Yahoo was only paying for half of their total bandwidth usage. At the time Yahoo was generating a lot of traffic. It helped Yahoo and the larger ISP's to bypass their expensive transit links, bypass the backbone, and connect eyeballs to content directly.
Netflix is breaking the long standing status quo. Last I checked, they accounted for ~30% of ALL of the traffic on the internet. Obviously that is going to skew the metrics, and that is why Netflix is trying to push their own CDN. I do not know the particulars there. IMO, if Netflix expects ISPs to pay for their CDN, they are on drugs.
It is a little bit more complicated than this. Netflix uses Cogent. Cogent has pissed off other backbone providers over the years. Netflix is suffering with Verizon because of the relationship with Cogent. Netflix should see if Verizon would be interested in peering with them "directly".
What they should do is run the numbers and figure out what costs more; "overage" charges from Cogent, or eating the cost of paying to deploy their CDN hardware and network links to the other Tier1 ISPs.
Are you suggesting that net neutrality should address situations like this? Are you saying that it is a good idea to have the government force a business to eat the cost of supporting someone else's business model? To me, that sounds like a big fat subsidy for Netflix at the expense of everyone else.
I DO NOT want the government to have any say in this stuff. I would rather the market figure out the details. Yeah, there might be bumps along the road, but I would rather have that than the long arm of government regulation causing stagnation.