Don't think of the company as one single highly aligned entity.

Probably what happened here was that a mid-level manager had a goal for 2021 to reduce paper billing by X percent. And came up with this as a quick trick to do it. Departments externalise negative effects to other parts of the company all the time. What they care about is their own goals and looking good to higher management. Not the interests of the company as a whole. This will only change when something causes a ruckus and top management finds out about it.

Also, the company is not really losing anything, the customer will sign up again, has to pay reconnection fees and will probably be forced to e-bill "because paper billing is no longer available for new customers". Triple win for the company really.

Of course the customer can move to another company but they'll probably want to keep their number and the whole portability rigmarole is much too difficult for this type of customer.

I would say most people, even most people still using paper billing in 2022, have a billing method set up (be it CC charges, direct debits or standing order) that would allow their bill to continue to be paid for their main utilities in the absence of receiving a paper bill. It's these people who the companies would rather cajole onto paperless billing.

Then there is the group who are still going to insist on/need paper bills, but use technology enough to catch the email about changing and use the opt out process.

I wouldn't say it's a dastardly plot to kick my elderly neighbour off their service, but simple disregard that people like her that would fall through the cracks while they're trying to save money with the first group.