The capabilities offered by the protocol you're envisioning already exist in the form of firewall rules and BGP peering agreements.
Most websites and networks would suffer more from blocking residential ISP traffic than they do from misuse of residential ISP traffic, though...
No. If you have majority of customers in country A, but the attack comes from country B, it is better to cut off B to keep the web services working.
BGP doesn't allow to stop attacks this way as I understand.