The less magical the internet seems, the easier it'll be for the public to get behind issues of internet security and privacy at the policy level.
https://people.torproject.org/~karsten/tor-brochure/tor-broc...
An ISP employee know whom either side of an connection are and can pick and chose targets in a very selective way. As gate keepers they can also be influenced by outsiders to target specific users and attack them. They are however likely to get caught if they do noticeable attacks and risks their job if its unsanctioned, and risk the companies reputation if it is sanctioned.
A Tor operator can not see whom is doing the connection, but they are slightly less likely to get caught if they do try to attack users. They are also only going to lose the nodes ip address reputation if they are caught attacking users.
Third is the backbone networks that unlike the ISP level has great incentives for government level attackers to collect whole nations/continents amount of data. The risk that they are found out is almost zero, and if they are they can still deny it.
All in all, I would summarize in such a way that ISP's has the greater risk of active attacks by both criminal actors and government level actors, backbone networks for passive attacks by government level actors, and tor nodes for passive attacks by criminal actors. In order to protect against all three you got to use end-to-end encryption as the primary security technique and adding tor helps then against meta data attacks.
I've since started using 'whole premises VPN' (all traffic is routed through an encrypted tunnel to a VPS) - I have more confidence in my VPS provider than I do in my residential ISPs. At least the VPS company probably won't use my connection data for marketing profiles..
A false sense of security is worse than no security at all.
For example, when you use the (recommended) Tor Browser Bundle the start page contains a window containing the following headsup
"Tor is NOT all you need to browse anonymously! You may need to change some of your browsing habits to ensure your identity stays safe."
As well as a link to https://www.torproject.org/download/download.html.en#warning.
That same warning is also present on the main download page: https://www.torproject.org/download/download-easy.html.en
If there were one thing I could change about security discussions, it's that you can't talk about security in the abstract -- only security relative to some threat or foe.
I think a lot of the conversation would change if we could get people to start talking about security that way.