I don't understand the two-tiered internet offerings either. This is 2014, IP connectivity is cheap and even mobile devices have become bandwidth demanding. Thanks for letting me check my email for free but do I really have to pay in order to watch a youtube video when Starbucks down the road offers it for free? Do the people who make this decisions live on this planet?
For me announcements like this read as follows: We (i.e. our sales and marketing departments realising that we are losing customers to the four star down the road due to our outdated policies) are pleased to announce that we will offer a bottle of water for free in each room per day. Any extra bottle will be charged at £3.50. Soft drinks remain at £7.