Because in principle, all the same amount of resources could fund the same work and yet a far greater audience could get that much greater value without paywalls.
Paywalls are a compromise that dramatically reduces the overall benefit a work has in order to get over the freerider problem that public goods face.
Basically: the PAY part isn't the problem, the WALL part is.
I mean that it's not an absolutely set necessary conclusion that stuff can't get funded equally well without paywalls. It might require different cultural norms, different ways to organize people or many other solutions, but IN PRINCIPLE the resources are available and could be available without paywalls.
And other than securing funding, there's nothing else positive about paywalls (although I'll admit there's potential arguments around ideas like people appreciating things more when they have to pay for them — things that still don't anywhere near outweigh all the negatives that paywalls have)
Paywalls are a compromise that dramatically reduces the overall benefit a work has in order to get over the freerider problem that public goods face.
Basically: the PAY part isn't the problem, the WALL part is.