I believe the innovation is that the satellites sit in low earth orbit.
Traditional internet satellites operate in geostationary orbit, which is around 35,000km above the surface of the earth. This was preferable because with only a handful of satellites you could give the entire globe internet connection. However you have much higher latency due to the distance. Not exactly sure why the bandwidth is so slow, distance probably doesn't help here either. Maybe those companies are also running outdated systems.
Starlink satellites operate in low earth orbit which is around 400km, which is way closer, leading to far lower latency. However, at that distance you need to basically cover the sky with satellites in order to always see one. That's why they're planning to launch thousands of them.
Another reason the lower orbit wasn't possible before is that atmospheric drag actually causes the satellites orbit to decay much faster. So they must be constantly replaced.
It is possible and has been done before in the past. The companies that tried it went bankrupt because the business plan doesn't work out. The ground stations are too expensive for end consumers. Starlink will likely see the same fate unless they get government money.
As pointed out in many places, the launch costs are still being paid for by their lack of funding from other commercial launches. The bulk of the cost is not in launches; it's running an ISP and equipment.
