Starlink isn't designed to offer lower latency or lower prices than existing terrestrial wired or wireless ISPs (at least, decent ones). Instead it's designed to offer a low latency wireless service in places where that has never been available at all. Which is most of the land area of the Earth, and all of the ocean. It may also be cheaper and/or faster than some very bad terrestrial ISPs, because there are a lot of those out there, but that's not what it's designed for.
Impact on earth-based telescopes has been discussed endlessly, to the point where it seems like there's a law that you can't mention Starlink on the Internet without talking about it. And SpaceX responded by talking to the astronomers most affected by Starlink and adding a sunshade that should prevent the satellites from ruining their images. Which is more than any other satellite operator has ever done, AFAIK, and there are many satellites much brighter than Starlink in the sky today.
The Pentagon is certainly interested in Starlink, but commercial service has much higher revenue potential. There are several competitors planning to do roughly the same thing as Starlink, so the business plan is at least plausible.