... if everybody who could peer in N places worldwide could just get peering, then all kinds of per-bit revenue for "high tier" network owners would turn into per-port revenue for exchange point operators. ...
Well, I think as a local operator you can not expect to be able to peer with everyone to receive global routes but theres no reason not to exchange local routes comparable to the area your own network covers, this wont affect transit sales and wont cost you in backhaul either. Thats a slightly different perspective than assuming you can get a providers to exchange all their network with you in a settlement free bilateral.
there we go again, talking technology and making the technological kind of sense. peering isn't a technology decision, it's a business decision. as a local operator myself (ISC), i know that i should not expect peering other than if someone wants their customers to have better access to the f-root server or the kernel.org ftp server or whatever. it's actually easier for me, as a nonprofit, to attract what mr. bill calls 'content peering' relationships, since i don't compete with the folks i peer with. however, in a former job, i took the reins of abovenet and used a lot of mfn fiber and mfn resources (back when they had resources to use, that is) and built a network that touched down in more places with more gigawhuppas and more bit-miles and so on than about half of the current so called "top tier" networks had then (or indeed have now). i surrounded PSI on all sides, with a network that carried more actual traffic and had more provable headroom, and more endpoints. yet they still insisted on playing peering games. (perhaps if they'd won those games they would still exist today?) peering is not about equity, or ratios, or technology. it's about money. sadly, too many people are focusing on their share of the current market rather than on the size of the eventual market, so, short-term thinking pervades the space, and the actual customers who source and sink all this traffic don't ride a curve that looks anything like moore's law. try a thought experiment. take about $450M in vee cee money, buy up a lot of bankrupt capital and routes, hire a bunch of starving backbone engineers and sales/marketing/finance/etc people at downsized salaries, and build a network that attends about 40 major carrier interconnect locations (some internet exchanges, some carrier motels). document the hell out of it, so that when you enter peering negotiations with the current "top tier" networks you've got "attachment A" already done and audited. now ask yourself the chances of becoming defaultless and settlement free before you run out of cash. (now, does anybody still think peering is a technology issue?)
And definitely to your gamers and possibly your VoIP folks to (depending on details) they will be very fickle on your network connectivity and the quality of local peerings is crucial to these applications, gaming is growing very quickly as more people get flat fee broadband and to a residential access provider I wouldnt underestimate how much it could hurt to increase the path to the servers by a couple of hops.
like i said, we're living in the shadow of bankrupt overcapacity, and until we burn it off, "cost per bit-mile" is going to be too low to measure when compared with "cost per peering edge". the next six to twelve months will favour the "small number of large peering edges" model. once the capital and routes are rightpriced, and transit contracts are rightpriced, and we reach some kind of equilibrium between the value and cost of traffic, then some kind of technological argument about peering might hold some sway.