They probably are just incompetent. Killing internet to someone not using it wouldn't really save anything. I've had the same service provider for 5 years and only had one interruption due to a downed pole or something. Cox and Comcast though, CONSTANT issues.

They don't need to, they already use overprovisioning for bandwidth.

It's only in rare cases where the backend is so old and limited that it only supports a specific maximum number of active clients that they do that, and I've only heard about it in rural areas and similar places