The phone company would have been happy to sell you more phone lines. I knew people who had some.

But you're right that as dumb as it is, it's likely that ISPs would have charged per "device" (ie per IP address).

Before 1983 in the US, you could only rent a phone, not own one (at least not officially) and the phone company would charge a rental fee based on how many phones you had rented from them. Then, when people could buy their own phones, they still charged you per phone that you had connected! You could lie, but they charged you.

Like I said, I have mixed feelings about NATs, but you're right that the companies would have taken advantage of customers.