Presumably they'd lose money when a DDoS originating from their network causes all their ips to get blocked.

They already lease them out. TELUS in Canada traditional old ISP rents large portion of their space to a mostly used for Chinese GFW VPN server provider in LA „Psychz“

The ISPs have to submit plans on how to use their IPs for the public,especially for IPv4, Arnic shouldn't approve this kind of stuff. Unless they lied in their ip block application, in which case they should be revoked their block.

I filled out one of these for Cogent to get a /24. I was being honest but all I had to put was services that requires their own IP. I even listed a few but no where near the 253.

They also never responded back and were like "what about NAT" or "what about host based routing".

Not sure what you filled out, but blocks are handed usually not to end users, but to providers that will sublease the ips to their client. So if you are asking for a block for a couple of your HTTP servers, that's a no. If you rent HTTP servers to, say, local small businesses, then that's a yes.

less expensive IP space, more efficient hardware, and lower complexity if you can eliminate NAT.