What "legitimate" need is there for residential IPs? These are internet connections that are generally less reliable than commercial connections. The biggest usage for them is for fooling web sites into the nature of the traffic they are serving.
On the business side, there’s a real need to be able to scrape say LinkedIn or Amazon, which necessitates rotating IPs to avoid getting blocked. The legal precedent currently incentivizes this sort of behavior between both parties.
Mentioned also, however, is that criminals can use the technology to advance fraud.
The real user/owner would get a captcha and be fine for most big sites.
*not sticking up for any of these companies, but I have required residential proxies in the past to scrape Google PLAs.