Netflix couldn't know what the outcome was going to be, so they hedged by creating a technical solution to the problem. They still pay the ISPs, but for colo services instead of the net neutrality ransom. The problem with paying ransom is it'll just keep going up. Colo services could also keep going up, but it's much more constrained because there's an actual good/service being provided and not just paying money to change a firewall/QoS box rule.

My understanding was that the retail ISP monopolies were refusing Netflix's caching servers unless Netflix agreed to pay 'value'-priced access contracts.

Caching can delay the net neutrality issue by NOT serving the contents from the first party. ISPs peering Netflix won't suffer the heavy traffic (thus no reason to charge tons of money), and ISPs that hosts caches can achieve higher QoS for their customers and also can possibly charge other peers who don't host caches. It's a win-win strategy.