Because of currency exchange fees that would be incurred by using cards or other options (although Sweden has the same problem.) Within the eurozone I don't even bother taking any extra cash with me.
In the US there are several cards marketed to travelers, so zero fees for intl transactions and competitive exchange rates are becoming common.
Even so, most tourists may not know their card's terms, and probably couldn't immediately tell you if the cash advance fee would be preferable to the international transaction fee, and so choose poorly.
Yeah. I have a couple cards that don't have [foreign transaction] fees but they're both cards I pay for aimed at frequent travelers. I think I pay a fee with any of my free cards. As you say, I expect a lot of casual tourists just feel more comfortable paying cash--even if that does get into the whole "what the heck is this coin anyway?"
Haven't found a fee free travel card for canadians... in fact our major bank (TD) just increased FX fees from 2.5% - > 3.5% on foreign transactions, on top of a super unfavourable exchange rate. I usually bring stacks of cash on my trips.
Even so, most tourists may not know their card's terms, and probably couldn't immediately tell you if the cash advance fee would be preferable to the international transaction fee, and so choose poorly.