IMO most of their customer demographic is the edgy online teenager who wants to mess with someone on the internet, not adults or companies going after any businesses or the like.
Just look at the ADs to these sites that are super flashy and cool to cater to these teens
That's ok. I wouldn't necessarily advocate jail time for them but there should be real consequences. Lots of community service or internet usage resrictions would help them learn that people aren't fucking around about this.
Its a known tactic in competitive online games where you can see your opponents IP address to try to "boot them" via DDOS their local IP so they go down or have lessened performance and you win the match. Also harass or shake down kids they think have money. Fortunately the vast majority of people have dynamic IPs, and could likely get a non effected one by just unplugging their router and letting it get a clean IP.
Because of this, a lot of games companies will try to mask the actual IP of the other users now, and Steam has tooling for games they support for devs on their platform.
Yeah ddosing and gaming have a long history. Over a decade ago these type of services were very popular on other games like Halo, CSGO, & runescape. I was pretty active in the runescape PVP community and around ~2010 onwards tons of people were using these types of services to ddos other players/rival teams & even the game servers themselves. It was especially bad on runescape because ddosing had a financial motive (killing someone for their gear that is worth real money is earlier when they lose connection). At the time hiding your IP wasn't as easy as it is now (Skype was super popular like you pointed out, but so were things like teamspeak & 3rd party forums).