I don't know how internet is served in the states, but here in the UK most ISPs do it because they have to.

Most internet in the UK comes through the telephone line, and whilst we pay for speeds of "up to 20mbps" for example, most customers will only get this outside of peak times. If there is heavy local usage then the speed available to each customer may only be 10mbps as the total bandwidth at the telephone exchange is shared between all customers. Now if customers all decide to cap their speeds downloading the latest glee episodes or twilight movies then the available bandwidth at the exchange is reduced and so others have a poorer service. By capping speeds either at peak times or for certain protocols ISPs are able to provide a service that can be used by all.

Personally I think it sucks, but I understand it has to happen. I'm just willing to pay a little bit more to get the best service in my area. I don't know how my 40mbps connection (with no shaping, throttling or anything else - I always get 37mbps+) compares globally.