Budget-wise it becomes impossible.

Coin-operated meters means someone have to come around checking the meter, collect coins, check the parking tickets. One person can only cover so many devices per day.

Then you have mechanical maintenance, with that comes disputes with "it was broken, it didn't accept the money" and so forth.

I've probably forgotten a number of other related things, but compare the above to digital solution.

Parking app, where the customer pays only for the parked time, no fiddling with money or keeping track of time. The parking attendant checks much quicker by just scanning the license plate while walking the rounds (could be done via car and a mounted camera even).

Analog just costs more, and citizens doesn't want taxes to go to things that are not strictly necessary.

It was possible for many decades already, budget and maintenance-wise. You can at least accept a credit card as an alternative. Yes, it's not perfect, but the fully digital alternatives also have drawbacks, as pointed by OP.