Because they're expensive and Berlin doesn't have money. They were also coin operated and thus frequently broken into and out of service because of that. They mostly have contactless pay now, which has disadvantages as well because its less accessible (especially for children and senior people).
Berlin’s economy is unique for a major capital. Berlin is one of the weaker states economically in Germany. Mostly an effect of the division when most major industry left towards a place where the Soviet Army is not 5 minutes away and the city might be cut off from supplies at any moment. It’s been getting better but only recently the GDP per capita of Berlin rose above that of Germany overall.
This was radically different before World War 2. In 1938 Berlin made up 10% of GDP (and Germany was bigger back then). Major companies like Lufthansa and Deutsche Bank were headquartered in Berlin. It was the center of the new Electrical industry being home of both Siemens and AEG.
Berlin has the disadvantage of historically being an enclave of Western Germany in the communist GDR, very hard/expensive to supply as a result and always at risk of the commies forcibly annexing it. No large (and thus: tax-paying) company wanted to set up its headquarters there for that reason, and additionally as it was an enclave there was no place for industry to set up production facilities.
Nowadays, Berlin has a shit ton of "startups" HQ'd there, but they pay barely any taxes compared to production industry heavyweights.
Berlin can afford to have free public toilets when significantly poorer cities can. And yes, not charging for use can actually reduce the overal operating cost more than what you would have gained from the fee.
