Because they don’t want you to host things at your house, even though that’s perfectly fine from a technical standpoint. They might want to sell you a “business” line for this, or they just don’t want the traffic (since at least in my area, traffic is always included in any home Internet connection).

They are practically infinite, but finite technically.

I imagine the reasons include convenience (for the ISP) and the possibility of upselling.

There is at least one advantage to customers: address rotation makes it harder for third parties to track you.