How does writing them off save money though? They have already been made, the costs of distribution are tiny.

"Warner Bros didn't think that ticket sales / streaming revenue would recoup the losses they'd incur by paying for marketing, distribution, rights negotiation, and all the other costs they're saving by stopping the project here."

For many movies the marketing and related costs of release are as much as the budget to make them.

They can get a tax benefit for it

That's the bit I don't understand. That money they spent on developing the film will get written off against tax whether the film is launched or not. How is it different if they scrap the film?

Normally, that is the case. But the tax code is riddled with special exceptions and carve outs for all kinds of special interests, so I wouldn't be surprised if there was some kind of special tax credit or write off of unrealized profits specifically for the film industry.

Writing them off should require releasing them into the public domain.