Solution 3:
Sorry, but doesn't
we have virtually unlimited processing and storage capacity
mean
that we have virtually unlimited bandwidth
Not in the slightest.
Analogy 1 would be having a very large beverage(storage) and a very large mouth(cpu).
The analog to bandwidth would be a beverage straw; a standard soft-drink straw works much better than the tiny straws they put in cocktails.
The second analogy would be automotive.
You can have a very big engine, let's say from a commercial dump truck.
And you can have very big tires, from the same truck.
But if the driveshaft came from a tiny little Fiat; it would twist to the point that it shears in two if you tried to go full throttle
Analogy number 3 will be highways. You can have a 2 lane highway and do 150km/h easily at 3am when nobody else is around.
That same highway during the morning rush hour can be packed with all sorts of commuters, and you will be lucky if you can go 50km/h