"Every server-side entity affecting a client needs to have its state broadcast to that client" is true, but you're presuming all those entities are going to be server-side, which in most cases they're not.

Yes I can imagine if you put all the state on the server and broadcast all that to the clients, you can easily use 20mbps for a massive game, more like 200mbps. Would also imagine it'd be insanely laggy, and not because of the bandwidth itself. At that point you're probably better off just streaming the video, cause at least clients can uh "parse" that quickly.