Because it's an extra step to go to a shitty exchange and convert your BTC to ITNS? That step should be justified somehow. The quality of VPN service through ITNS is likely to be lower than the established commercial services with guaranteed bandwidth and availability. If I want high speed VPN I'll pay to a trusted provider with BTC. If I'm focused on anonymity and don't care about speed I'll just use Tor for free. I'm not saying there's no place for ITNS-based VPN on the market, it's just that market is already pretty crowded and fitting in there is no easy task.
Not in China and similar countries you won't. Any known VPN providers end up in the Great Firewall. That's the point here, it's almost impossible to block a decentralized VPN service without blocking every IP address in the world.
Yep, that's my assessment as well, and why I am still mining ITNS. *If* Pallas and co. pull this off it will be a helluva use case for a coin. If not, well... I will have wasted a few hundred kW-hr of energy.