1) "big popular" ISPs are often filling multiple slots on any server
2) If they are on the same ISP, chances are they are both on dynamic addressing
3) A ban increases the chance your system will fail :p
4) Each ISP will have its own way of doing things, some rotate IP addresses automatically so the chances could be quite high
5) True, but hundreds of thousands of players only increases the chance your system will fail
6) If the ISP has a good route to your server, chances are people from the same ISP will join due to the lower pings
Plus, you will not be able to identify "false bans" as you could not have a method to verify the identity of the people banned. If we all had static IP addresses, this system would be great - but most domestic connections have a dynamic IP address. If you have lots of bans due to your IP tracking, then personally I would be a bit worried about who I'm banning
Also, you might want to keep in mind that most kids with a cafe account probably ritually change their IP address to avoid IP bans & mask their identity.
If I were in your place, I would only track multiple bans from the same IP address. Once an address has reached a pre-set limit only then would I wipe out the IP. Its far from perfect though, and the same problems still apply - just the chances of banning the wrong people are less due to the "ban limit" buffer.
I'm just picking holes anyway, don't mind me - I'm a system whore :]