The problem is that there isnt an unlimited supply, in this case of time. The generator that accepts every transaction is not going to be 100% of the blocks generated, therefore there will be transactions that dont get accepted in every block (i.e. low fee ones). What people are paying for isnt to be included (where they are included anyway in the long run), but rather to be included more reliably in the next block(s).
Close to 100%. You will get few generators who selflessly sacrifice their own profits to keep prices up for their competitors.