Intercepting port 25 traffic of your customers (as an ISP), redirecting it to your own servers, and allowing the connection to complete sounds like a pretty slippery slope of badness to me.
Sure, you should be using TLS anyway, but slurping up port 25 traffic begs the question of what is happening to the SMTP authentication credentials or the mail data that flows through said intercept.
Blocking traffic versus intercepting it wholesale are very different ballgames.
Now, obviously, whoever is providing your pipe has the technical ability to intercept your traffic. Actually doing this has proven widely unpopular (to place it nicely) when uncovered, even with the best of intentions.
There is usually an implicit trust that your ISP won't be employing underhanded tactics like that in most people's minds, I think. I suspect that most people will call any interception of their outbound mail traffic "underhanded", even for if done for a perceived good reason in the mind of said ISP.
- S