Because how you personally decide to handle cost overruns is up to you. AWS by itself can’t make that decision for you.
The opposite problem when you do set low limits by default is that you constantly have to submit tickets to AWS to ask for service limit increases.
How is AWS suppose to know whether you want to immediately scale or not?
And before July of this year, there was no such thing as a “free tier AWS account”. There were services that allowed certain amount free.