But why couldn't DB Netz do both people and freight, if both are profitable (after subsidies for passenger traffic)? i.e. why does it have to be a choice?
Because things which are designed to be good at one thing will not be as good at other things. There's only so much rail network and given a conflict either freight is a priority or passengers are. You can't have two number 1 priorities.
I'm pretty impressed with India opening dedicated freight corridors. It's double-track that is optimized for longer, heavier freight trains. It seems obvious that the different operational patterns of freight and passenger rail means they each should have their own tracks. The only thing they did "wrong" IMO was to have level crossings where cars & trucks can get hit by the trains.
They could but german rail is already ridiculously crowded when factoring in all the safety regulations. Automation on the speed control already lets them pack the lines pretty tightly, which may be one reason why they've removed so much rail already.
Germans, in my experience, tend to be pretty rational folks. As much as the public likes to ream the decision makers for poor choices while armed with the perfect clarity of hindsight, my guess is they've gotten to this point because all the other choices seemed worse at the time they considered them.
On high speed lines, you often can only run either one of those. Not only that freight trains are slower, but they often aren't allowed to use tunnels at the same time as high speed passengers trains. So on some of the most direct and modern tracks, freight can only be run at night.
Typically everyone does both freight and passengers, but it'll be better at one or the other. Passengers want fast trains with few delays that get close to population centers. Freight doesn't care about speed as much but cares about the overall throughput and wants to end up in distribution centers.
Anyway, about "distribution centers" - just have an optional turn when approaching some town, choosing between the central train station and the "distribution center" location. That in itself does not sound like much of an issue.
However, other comments suggest that freight needs _slow_ speed and must avoid tunnels. Maybe that's the reason?
I think they do. The Dutch railway definitely does. But a lot of freight is actually transported over rivers, which is very efficient. Though also still by trucks, sadly, which is not.