The concept of a demarcation point is a focal point across all telcom contracts, akin to the concept of a property lines. Unless MA Bell is going to own all the equipment in your house, their responsibilities need to end at a clear point. To see the physical manifestation, open up the first layer (yours) of the phone box on the outside of a residence (and note that the second layer requires a different kind of screwdriver!)

Wholesale is cheaper because the overhead per unit is reduced. Business class connections give you a static IP and hopefully service commitments. These things have differences in what is actually being provided, not just a contract which says 'for business'. People work from home on consumer connections all the time, and there's probably a vestigal clause in those service contracts about 'not for business use'. And people declare business vehicles because they're cheaper as tax writeoffs (and then do use them personally as a perk of the business).

Telling the providers that I have one device hooked to their network (even though I have more devices hooked to that one) is separation of concerns, not fraud. Should they be able to bill me more based on my yearly income? That surely is every businesses dream - the ultimate in price descrimination. The only thing the carrier should be concerned about is the quantity and size of packets I send through them. If anything is fraud, it's the carriers advertising 'unlimited internet', then hassling you for using it too much, and mangling your packets in direct contradiction of the seminal End-to-End paper.