I've been using a site with the same withdrawal minimum and they have been offering that "free withdrawal fee" for quite awhile, maybe that's what gamblers love about their site and it's instant as well, so I guess this kind of service would really attract gamblers, big or small time gamblers.
Casinos are offering that kind of service to make their customers happy. If you are happy, of course, you will play more, right? So I believe they are also building long-term relationship with their players. And that fee is actually negligible as compared to what they may earn from this feature.
Its depends upon the casino, if the casino only offers free withdrawal features but lacks on good repute, bad design or support, people will not play there.
This feature is attractive but site should be a trusted one, only then they could gain more gamblers on their site.