If Gmail proved anything, it was that people would, for the most part, accept any terms of service. Or at least not care enough to read the fine-print closely.
Even then, Hotmail, Y! Mail and your shitty ISP's shitty POP mailbox were reading the contents of your emails and selling adverts based on the contents. At least with GMail they gave us the dignity of a nice UI and adequate storage.
At that time I honestly doubt NetZero was scanning my emails to deliver targeted ads. Doing that required hiring teams of engineers to write the software to do the scanning, scoring, and then mapping advertisers to specific customer groups. Its non trivial.
Most ISPs didn't have the money or the foresight to do that.
I don't know who NetZero are/were, but a number of UK ISPs were selling email and browser keywords to advertisers in the early aughts, including big players like BT and FreeServe. Some even tried to launch a project that would use DPI to inspect all web and email traffic and dynamically inject ads into email and webpages.