It's not just because they can't use the code, it's also because WTFPL doesn't include some very important things for a license (like a warranty disclaimer), meaning just contributing to the code could get you into legal trouble.
The legal system and lawyers aren't just some kind of conspiracy that only exists to funnel money into their system, they solve a very real purpose.
"Do what the fuck you want" isn't even a good sentence, let alone a statement on what you can do, how your liability is limited, rules on naming and attribution, etc...
Questions like "Can I use this without attribution?", "Can I hold you liable for the code you wrote?", "Will you charge me for using this code?", "What does the license cover? (documentation? just the program? just source code?)", and "Who owns the copyright for this work?" are not answered by the license, leaving them all up in the air.
I'm not going to use code that someone can attempt to charge me for using later, and I'm not going to contribute to code that can cause me to be sued for my contributions not working.
I get the want for simple licenses, but I feel that licenses like MIT or Apache2 are simple enough to be understood by most people, and they fulfil all the checkboxes of a real license.
It's especially telling that the WTFPL contains a clause which calls out a lot of this information for the license text only (must be distributed verbatim or have the name changed, all are permitted to distribute it, and a copyright for the license text).
The answers to those questions seem pretty clear to me
Just do what the fuck you want with everything in the repo. No copyright, if you want to say that you created the code and rebase all history, it's also your right. Feel free.
And it seems kind of obvious you can't hold the author liable for any trouble (though I don't know anything about law so maybe it's more complicated than it looks). Also it says in the FAQ that you can just add a warranty clause if you need one.
>And it seems kind of obvious you can't hold the author liable for any trouble
But legally it's not obvious. I'm not a lawyer, and I don't pretend to understand all of the concepts, but I believe there is a concept of "fit for purpose" where unless you specifically say otherwise, it is assumed that your "creation" will do what it says it will do, and if it fails to do that in a way that harms someone, you can be held liable. A company that makes ladders can't claim it's not their fault that it collapsed unless they put in very obvious and clear wording that the ladder has no warranty or purpose and they can't be held accountable. Similarly, your code that pads strings on the left is expected to do so, and if it doesn't and that causes harm to someone, then they could claim that you are liable for at least part of those damages.
Also, there is no such thing as "no copyright" in many parts of the world. IIRC in the US EVERYTHING has copyright automatically and until it expires, even if it's not declared. You can't "give up" your copyright, all you can do is license it. Again, i'm not a lawyer, but this is how I understand the system works.
Answers to those questions may seem obvious to a layperson, but they aren't to a legal system. And choosing to not participate in the legal shit doesn't mean you are immune to the law.
If it were a conspiracy to fuel business, I'd expect them to say use it then unpick the mess when someone brings a legal action.
It's just too vague to be useful - legitimate questions such as "does it cover code only or documentation as well?", or "is the author disclaiming any warranties or liability that may be implied by the law?" are left unanswered.
There seems little reason to use it over e.g. MIT or FPL-1.0.0, both of which accomplish similar ends and are quite readable without introducing a bunch of uncertainty for both parties.
WTFPL can include a warranty clause (see [0] «Why is there no “no warranty” clause?»)
Also, the Google guidelines consider that WTFPL is recognised as open source by OSI, yet there seems to be some opinion from FSF people that it is free software (see [0] «Is the WTFPL a valid license?»).