The reason for the extortionate costs? Probably to make up for the lost revenue streams from people not using the in-room phones any more. I hope at that at least in this instance the guy wasn't paying for the internet access, that would be taking the p*ss!
For those of you in the UK then the show is here:
Why watch expensive in-room pr0n from Lodgenet (and have to explain the charge on your bill) when a browser will serve up similar at a lower cost?