Have You Really Read Your ISP's TOS?
I don't agree with your assessment.
Anyone who hacks the system but doesn't inform the sysadmin runs the risk of being found out (by the sysadmin or by another hacker). At that point an investigation will start to determine how long abuse has been taking place. It would be pretty easy to show that the hacker violated his terms of service (presence of an unauthorised proxy, stash of porn in a hidden subdirectory, DDoS daemon running etc...).
XS4ALL's TOS simply protect the 'ethical' hacker. And by the way, there are plenty of people (in their right mind) who do that sort of thing; Lamo springs to mind as a well-known example.
Besides, this was only one reason why I like my ISP. There is also a notable absence of annoying clauses in their TOS. Like: no restriction on home networks, no restriction on what services you run (as long as you don't harm others, e.g. no open relays). Apart from favourable TOS they also have policies that I can identify with; they actively protect the privacy and freedom of their users, actively protect free speech, take a strong anti-spam position and are at the forefront of new technology. They are also reliable and give good service. All this at a very reasonable price. (Sorry if I sound like an advertisement, but I really am a satisfied customer)