It's because it runs contrary to the concept of net neutrality -- ISPs are dumb pipes, and trying to differentiate between different "traffic patterns" can only lead us down a very dark hole of no return.
This has nothing to do with net neutrality or traffic patterns. Its a service agreement that says you are not allowed to run a commercial server on their residential service.
What happens when you are caught violating the TOS?
The point of net neutrality is that any Internet connected computer should be able to communicate with any other Internet connected computer, without having to pay surcharges or extra fees, without limitations on protocols, directions, purpose, content, etc. It makes no difference if you are being restricted by a contract or by a technical system. If you are unable to host servers using your Internet connection you are not enjoying net neutrality, regardless of why you cannot host servers.
You will probably be warned then future violations will probably lead to a contract termination. Neither of which has anything to do with treating all packets as equal at the network level.
Sending email spam, downloading child porn, etc, etc also violates their ToS. However just as long they as treat those packets the same as any other packet they are network neutral.
