Neil,
You are assuming that the goal of all internet service providers
is to have the best connectivity possible, without respect for
cost, administrative overhead, or market strategy.
If X is really really big, and Y is really really small, then
perhaps it would benefit X to have Y as a paying customer instead
of as a peer.
The word peer implies equals, as it has so long been repeated.
If provider X is missing 0.01% of the market share, and provider Y
is missing 20% of the market share, who will be more upset, I
ask..
-alan