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As somebody who once worked at an ISP: they absolutely do that, and it isn’t illegal. In fact, ISP’s host many of Ookla’s speedtest servers. The less infrastructure your test needs to go through, the better the results will be—there’s nothing faster than a network that’s communicating with itself.
I store my master password on a sticky note attached to the bottom of my desktop’s power supply. Easily accessible if I were to die, but sufficiently secure that if it were physically compromised I would have significantly worse problems on my hands.