~Kind of sounds like it failed.~ Apparently Google Fiber is starting to expand again. I still think it serves as a good case against why the current climate makes it near-impossible for a "plucky upstart [with vc funding]" to start a large, traditional ISP.
> Starting a small ISP based out of extreme dissatisfaction with huge, evil incumbents is something that I encourage any plucky upstart to do. ... Just don't try to do it with $20,000 and some good wishes, because something with much deeper pockets like Webpass will come along and obliterate you.
You can't be a plucky upstart while simultaneously having pockets deep enough to fend against the current major ISP players.
I'm not going to sit here and reply line-by-line to your post. The issue isn't that people want a free network. The issue is that people are fed up with the large ISPs and that the large ISPs have made it all-but-impossible to start an ISP.
You seem to think that VC-sized money is the only thing people need to enter the market. You're entirely wrong. Entrenched players have made it next-to-impossible to compete in terms of capital and regulatory hurdles.