I do not intend to dispute your general argument, though I reserve the right to do so elsewhere/time <grin>. But there is one seemingly fallacious point folk seem to be repeatedly making.
If an organization could simply connect to an interconnect and gain global connectivity without paying for transit, why not?
As there are multiple peering points today, and not all providers are attached to all points, even if one peers with everybody at one point, one will not have global connectivity. If one were to permit free peerage to anyone appearing at only one single peering point, the lack of global connectivity available at a single peering point would become even more extreme. E.g. Mary's Homegrown ISP connected to MAE-Miami and not having a transit provider would not have connectivity to Joe's Down Home Linux Lair which does not buy transit yet peers with everyone at the Truckee NAP. randy