What you're describing is exactly the problem. I don't want to worry about whether or not I'm exceeding some subjective limit, I want a hard number limit that I can compare to my actual usage.
1. Competition. If you provide N gigabytes of storage/bandwidth, another provider will offer N * 2, and they instantly look more competitive, even if they aren't even actually capable of providing that. So, back when we provided limited plans, we were constantly being forced to increase our resource promises to unrealistic levels just to avoid looking stingy.
2. Expectations. If you provide N gigabytes of whatever, customers will expect (and demand!) that their site be able to use up all of their provided resources. This is both on a policy level ("what do you mean I saturated the interface?") and on a technical level ("why can't I serve 100 gigabytes of dynamic HTML a month?") This becomes an increasing issue as competition drives the provides up, and the actual resources you're supposed to provide are absurdly high. (Consider for instance 100tb.com, which was mentioned earlier in this thread - good luck actually pushing 300+ MBit constantly.)
In practice, the policy we've got now actually works better in some ways for customers because they don't have to care whether they're exceeding resource limits, either subjective OR objective. So long as they're running a site which complies with our Terms of Service, we'll do our best to keep it going, even if it gets big.
All of it is going to cost you more than Dreamhost's incredibly cheap prices - which are only possible because of it's police, as the guy stated.
It seems unfair at first - especially to a technical person, it's misleading - but the reality of hosting is that you do need to actually pay for the resources you are going to use - and the internet isn't free. The more your business is worth, the more you should be spending on solid contracts, multiple sourcing and fault tolerance.
Yes, but by not stating a limit, while still enforcing one at some point, you are effectively not allowing yourself to be compared with others.
It's cheating. Even a rough "approximate limit" would allow comparisons, but stating nothing is strictly cheating. Would Dreamhost allow me to run 100tb/day? 100pb/day? They don't say they won't... how do their prices compare against someone who would?
>... what any single machine can push out ...
That number wouldn't be very misleading, and could actually be useful - it's effectively the limit on a dumb fileserver. If their code results in a lower boundary, that's their fault, not yours, and not in the least incorrect because it's being restricted by them.
When the barrier to entry for an internet-based business is so low, I expect ISPs and other service providers to understand this requirement, and provide plans and prices accordingly.
Yes, it's subjective ("doesn't require us to upgrade infra just for you"), but so what? If you want hard numbers, go with the ones which advertise hard limits.