Beurocratic and political limitation.

Firewood and heating oil isn't cheaper, it merely has lower upfront cost in exchange for a higher total cost. An efficient governance system (whether that's capitalism and banks with loans or renting out the hearpumps or a centrally planned replacement program or anything else) would figure out the financing and save the system money by updating.

Technology can make the incentives even larger. Excess money can make it easier for the governance system to reach the solution. But it's at the point where without any improvement to either an ideal system would figure out how to make the switch happen.

There is also a minor incentive problem here, mainly that a landlord can/will often offload the running costs, Nebenkosten, to the renters indefinitely.

That means they are sometimes economically incentivized to choose an option with lower initial cost but a higher running cost. Governments can/do bend these incentives via taxes but it can be hard/expensive to renovate old complexes (and that part cannot directly be offloaded by the landlord).