The problem is that residential proxies are primarily used for abusive purposes, like credit card fraud (e.g. making purchases with a proxy in the same city as the credit card holder) or web forum spam. There are very few legitimate use cases for these services; most of the ones I have heard are either poorly justified (you don't really need a residential IP to test web site performance, for example) or borderline abusive (like content scraping or sneaker botting).

“If you give me six lines written by the hand of the most honest of men, I will find something in them which will hang him.”

-Cardinal Richelieu