I think the big deal here is that it's nothing short of a cash grab on the part of Netflix.
For the last decade Netflix has looked the other why (I will not say encouraged) on this policy or TOS. Why? They were the big dog and their business was still growing. Password sharing was like free advertising and marketing for them. Only now that the market is flooded with streaming services from every content provider, has Netflix considered tightening the screws on their "policy".
We pay for a plan that includes 3 streams or 3 screens simultaneously. Why should Netflix give one iota of where those three screens are coming from? The customer base they are hurting most here are families. Why should a college aged child be expected to sign up and pay for their own Netflix account? They should be able to mooch off Mom and/or Dad while they are in college. Maybe that Mom and/or Dad has a set of elderly parents on fixed income and they "help out" a bit with some stuff and letting their parents use that Netflix account to get some entertainment that is different from basic cable or satellite.
3 screens is 3 screens. Netflix incurs no extra cost if those screens stream to a single location or 3 different ones.
I know there are folks out there that are doing password sharing in a far more egregious manner than I'm describing above, those are the ones they should go after, they really should leave the families alone. ...And by family I mean parent, child, grandparent, grandchild. I'm not talking aunts, uncles, and cousins.
Off soap box. $.02 spent.