1. Should ISPs be responsible for abuse from within their customer base?
Not sure, ISPs role is just to move packets from A to B, you need to clearly define what constitutes abuse and how much of it is considered a crime. If I call your home every five minutes to harass you over the phone is AT&T responsible ?
1a. If so, how?
Pull the plug without looking at how much you are billing.
2. Should hosting providers also be held responsible for customers who abuse their services in a criminal manner?
Same as 1,
2.a If so, how?
Same as 1a.
I think anyone in their right mind would agree that if a provider see criminal activity, they should take action, no?
If that also holds true, then why doesn't it happen?
What incentive they have to do so ? and how liable they become if do something without a court order or such ?
Providers in the U.S. are the worst offenders of hosting/accommodating criminal activities by Eastern European criminals. Period.
Probably true, here money talks. Cheers Jorge