
What's the incentive for ISPs to secure their servers? None. Security doesn't sell to the overwhelming majority of folks who want to put up a Web site; the only three things they care about are price, price, and price. An ISP can be pwn3d sixteen ways from Sunday, with thousands of sites hosted on their servers penetrated daily, and they'll still make money.
What's the financial incentive for ISPs to disconnect compromised, malicious, or spammy customers? Again, none. They lose revenue, but what do they have to show for it, besides kudos from a handful of folks who care about security?
What's the financial incentive for ISPs to educate their customers about security? None. It's costly and it doesn't make a lick of difference to the bottom line.
I've written emails to ISPs that host compromised servers and have hundreds, or even thousands, or in two cases tens of thousands, of virus and malware droppers living on their networks, and received replies like "I see the problem and issues involved, I have to say what they are hosting is not right, but the best we could do is try to communicate with the client and urged him to stop or issue a 30 days termination notice per our terms of service if it is not resolved to our satisfaction. Please understand we have our difficulties as well from a service provider point of view and thank you for the understanding." (That's a direct quote, mind.) That is, when I receive a reply at all.
Until a direct, tangible incentive exists for ISPs to take responsibility for their networks, or a direct, tangible disincentive exists for ISPs to tolerate this kind of situation, or both, the situation will remain exactly as it is.