Why won’t you let me spend my funds on Apple Pay

We are other users - not Apple - so we can’t answer “why” any particular policy is in-place.

However, we CAN confirm that any amount “on” an AppleID balance is effectively “pre-paid” and generally non-refundable (except where explicitly required by local laws)

An AppleID balance generally can only be exchanged for Apple goods and services.

See:

What you can buy with your Apple Gift Card or Apple Account balance - Apple Support