Because the customer doesn't find out that the wifi is crap until they've already bought it, and they don't have an easy way of disputing the charge either. So unless repeat customers complain/start walking, the hotel has little incentive to pay money to fix this.

They don't care, switching is a pain and the given excuse is offered just to pacify the complaining customer. "Nothing we can do."

Because even Coase himself showed that his theorem is BS in real life situations: "In this 1960 paper, Coase argued that real-world transaction costs are rarely low enough to allow for efficient bargaining and hence the theorem is almost always inapplicable to economic reality."