We all like free shipping. But, at what price point does free shipping no longer benefit the seller? Right! When the shipping costs outweigh the cost of selling the coin. Most common coins can be shipped fairly cheaply. I have seen them in a envelope and forever stamp. Cheap as shipping comes. What if the coin you are selling does not even cover the cost of a stamp? Free shipping is probably not a good idea. I present exhibit A: http://www.ebay.com/itm/2017-D-Dime...aeb770ce7:g:s9AAAOSwW9ZZc5OY&autorefresh=true I was a bidder at $0.12. But, was out bid.
For that auction, the seller is likely paying at least 2 cents in ebay + paypal fees (if they have a store), a 30 cent paypal flat fee, and whatever the stamp costs. So before shipping costs, they are already looking at a loss of 12 cents. That would become even more expensive if the buyer left a negative! In my ebay sales, I usually try to have items be at least $10 before offering free shipping.
They most likely felt it was going to go much higher and got caught, it happens. They don't have the inventory listed to be worth trying to build feedback
I've never offered free shipping in my life and I've sold thousands of coins. I sell mostly coins in the $1.25-$3 range and as you say, free shipping doesn't make sense. It also doesn't make sense to use tracking for these, because your minimum cost is $2.61 for postage plus your envelopes, eBay and Paypal fees, etc. So if I sell a coin for a dollar I'd need to charge at least $3 for shipping, and who wants to pay three times as much for shipping as for the coin? Shipping is never free unless you're doing something dishonest or you got a bunch of free stamps somewhere, so someone has to pay for it, whether it's a straight up shipping fee or you charge more for the item. Ebay does everything they can to get a seller to offer free shipping and use tracking on everything, but for some items it just doesn't make sense.