this offering isn't bad because it is additional choice onto not too bad plans in the first place

Why do you say the plans are not too bad? Do they satisfy a legal standard of non-badness? Or are you comparing them to what is offered by other providers? These plans would have been miraculous a few years ago, and they will be horrible a few years from now.

Satisfying customer demand is the driving force behind offering these options. Profit is the main motivator, no question, and the most successful firms maximize profit by focusing on customer satisfaction.

what's to stop them from slowing your internet down solely to get you to pay more for 'packages' to 'unlock the full experience'?

What stops any business from degrading product quality, then adding an extra fee to restore the quality? (And then doing so again and again?)

While most people are appropriately cynical about corporate behavior, in this case people are not cynical enough. They have already jacked up the price as much as possible right up to the point where they risk losing profit to the competition. They already provide the very minimum (measured by cost to provide) that they can get away with, before too many customers switch to alternatives.