The problem is that the acount in question would be a “low” to “midling” usage account in youtube or twitch terms. The kind where your friends tell you “just keep at it and one day you might find success”.
Obviously vimeo is free to shed this user, as they are free to change business and open a goat farm in El Paso or a hair saloon in Brooklyn. This is not about vimeo’s rights or freedoms.
The idea behind service providers is that they pool together many similar needs and serve them more efficiently than individual users alone could. For example if vimeo would have tens of thousands of accounts who need an optimisation to make their video serving more efficient that could start to make sense for vimeo.
Now the problem is that it seems vimeo either doesn’t have the scale to pull this off, or decided to not do it. That is fine, but then why would anyone go into business with them? It sounds like vimeo is sinking and anyone who is a paying customer of them now is better get off and quick.