How can it be theft of service when they can deny you service at any time automatically by identifying abnormally heavy users and removing them?

This isn't like bypassing the electrical grid by running your own line from somebody else's service.

This is like saying it's theft of service to read a chapter in the bookstore. If you hang out there all day, you might get kicked out, but that's not a crime.

The courts might agree with you, but only because "computers are hard".

There's a world of difference between tunneling over DNS and compromising servers. Or at least, there should be.