Q: WPS set up on timecapsule

Because it is not needed by Apple and Apple only include what Apple needs .. because outside the walled garden of apple devices there is vacuum of space.

WPS is available via the airport utility.. it says for printers but will work on any WPS client.

Click the icon of the TC.. and you can then access it.

When you select WPS use first attempt not pin.

Why isn't there a wps button on the timecapsule

Same reason that there is no WPS button on any other Apple router.  Apple engineers following instructions from the product design folks, who hate buttons of any type.

The "first press" option in the WPS printer setup is a substitute for a button, and performs the same function as if you really were holding a physical button down.  Will work with any device, not just printers.