Well there was probably a reason but they weren't told it and with N26 being online-only had noone to turn to, you can do a google/twitter search for someone getting police called on them for showing up at their Berlin HQ/Backoffice trying to get some answers.
To be even fairer, this isn't even unique to online banks - regular banks in the US can "fire" customers without a reason and even if only because their heuristics find their profitability to be too low, but at least they get a notice and a chance to move their money.
I don't think it's about the expats specifically, native Germans just don't encounter it because they have little need for N26 in the first place and are mostly happy with their traditional banking services.