> Fraud yes, because they're underprovisioned if everyone asks for 1 Gb

All residential ISPs overprovision [1] at some point or another - be it at the acccess level (as with shared mediums like DOCSIS and GPON), distribution/aggregation (metro Ethernet switch and (V)DSL DSLAM uplinks) or at peering/upstream level (always).

You cannot expect to have non-overprovisioned 1Gbps at $60/mo, when global transit is currently around $0.6/Mbps/mo. Typical overprovisioning levels range from 1:8 to 1:16.

[1] - From the point of view of offered speeds vs. underprovisioning infrastructure, as you put it.

EDIT: corrected that DSL is not shared medium