Re: "How on earth can you give meaningful speed ratings to the non-technical general public anyway"
"By telling them what they are actually paying for. Specifically: line capacity - not speed.
As the speed is fixed at a percentage of the speed of light for the connection medium used."
I'm not sure if that's meant to be ironic or if you don't fully understand.
For advertising broadband to the public the term speed is used interchangeably to mean last mile bandwidth. Even then, bandwidth isn't exactly the right term, it's theoretical maximum throughput. It's easier to sell 'fast' broadband than it is to sell 'wider' broadband.
Some issues then arise. They are too obtuse for most non-technical members of the public to understand so it's incumbent on advertising regulators to make sure that consumers can compare like with like.
The first issue is that some mediums have a distance dependent element in the theoretical maximum throughput. It can be hard to guarantee in advance what that throughput will be - hence the 'up to' measurement beloved of ISPs.
The second issue is that it may not be possible to direct traffic to a user's last mile so as to fully utilise the available throughput. That may be down to congestion somewhere in the Internet - maybe under the ISP's control, maybe not - or even limitations with the server where the traffic originates.
A third issue is how a particular ISP chooses to interconnect with content providers. An ISP that has private network overlays directly into its nodes, makes use of CDNs and invites caching servers to be put onsite will offer a better performance to end users than one that depends on public Internet for that traffic, regardless of last mile throughput.
All of these things are hard to summarise in a catchy advert intented to catch the eye of the masses.
Your water pipe analogy is wrong as it considers only the last mile. If there's no water in the reservoir it doesn't matter how big your pipe is.