Let's not lose track of the 3 key parts involved here:
1. Supply side. These are providers who put packets onto the network.
2. Network. This is the collision based network system created many moons ago.
3. Consumption side. These are the consumers of the network packets from a provider.
The Supply side is where the Netflix and Level 3 type of peering issue(s) resides.
The Network is where the dropping of packets can and by design does occur.
The Consumption side is where local ISPs a) have been given monopolies as an incentive to spend a huge amount of money to implement last mile network cabling, and b) have a end user subscription model that intentionally over subscribes actual bandwidth.
Yes Consumers can also be Providers and vice-versa as well as Network providers can also be a Consumer or Provider in addition. However, I think we need to partition the discussion to the 3 parts individually or we will never come to any type of solution.