Is it really required to be an LEO constellation? It would certainly be good, so that eventually the satellites deorbit and contribute less to Kesseler syndrome risk. But some nation state might chose to not care about that and deploy at higher and more stable orbits.

Higher orbits also mean more latency and slower speeds.

Yes. We had satellite internet services before and they sucked bad due to latency. Space is big and light is slow.

Also, more people per satellite, so less capacity per person.

LEO means less RF power and lower latency.