[azernik]

The fault isn't just with cheapo Intel edge hardware - a lot of ISP infrastructure is built with the old telco mentality of "we never drop data". Which, as you correctly point out, is precisely the wrong thing to do for an overcongested IP network.

EDIT: And the resulting problem isn't just the resulting end-user latency. TCP's congestion control mechanisms (i.e. the ones that let the endpoints push as much traffic as the network can bear and no more) rely on quick feedback from the network when they push too much traffic. The traditional, quickest, and most widely implemented methods of feedback are packet drops - when those are replaced with wildly varying latency, it's hard to set a clear time-limit for "this packet was dropped", and Long-Fat-Network detection is a lot harder.