Going from "trusting" an entity that explicitly requires you to consent to spying when you sign up to trusting one which explicitly promises to protect your privacy when you sign up does seem like it would "help privacy" in most cases.
Why would I trust an entity that often has the legal backing to harvest my data and provide it to the government whenever they "deem" it necessary? The same government that has direct means of control over me? Whether it's the US, China, Germany, I think I'd rather put my chances with some private company that at least has financial and maybe ethical motivations (depending on the company) to protect my privacy. An ISP will only go as far as the law requires to protect it and who knows what backdoor deals are made with governments to subvert those same laws.
There is no realistic/helpful/useful legal process to sue over a breach of privacy. So my ISP being in my jurisdiction doesn't do me any good at all.
I think your logic holds up, but it's not quite as definitive as you say. VPNs are not the straightforward privacy upgrade that HTTPS is. (I don't think you were trying to imply otherwise.)
I think the picture improves if you choose more carefully. Choosing an established VPN that has a no-log policy and has been audited seems much better, because now multiple companies are putting their reputation on the line. On the other hand, I think a relatively unknown company that's reselling someone else's VPN and hoping to cash in on the "VPN = privacy" is only a slight upgrade over a major ISP.
[0]: https://www.latimes.com/business/story/2021-11-12/column-int... [1]: https://www.ftc.gov/system/files/documents/reports/look-what...