ISP-hosted Usenet was a cost center. Between the potential liability from illegal content, the heavy bandwidth usage of alt.binaries.* and the lack of interest in anything else, it's no wonder ISPs shut it down. Frankly I'm a little surprised they still offer email, I can't remember the last time someone gave me an ISP email address. I can't see any business model for ISPs to start offering Mastodon/ActivityPub either.

Back in the early days, a Usenet server represented a natural community - a university or employer. The early regional ISPs like Panix were small enough to still be community-like, though the common bond was looser. Modern ISPs, your Comcasts and Verizons, aren't communities at all, any more than customers of any other large business are. So although from a technological standpoint it makes sense to organize user-facing decentralized services on an ISP basis, from a social perspective it really doesn't anymore.