Most of the old crypto gambling sites that had faucets in the past removed them because the gambler never made a deposit and was never going too. Many pioneer bitcoin dice sites like Primedice didn't have any ads to gain revenue, their revenue was the house edge and dice profits. So if somebody won big at a faucet deposit then it was a pure loss for them.
This actually wasn't a big issue in 2016 like I recall, but in 2017 there was just too many people who were abusing the system and they had no choice but to reduce the faucet, then lower it even further and finally just get rid of it all together. Because it was too much of a headache to keep having to freeze withdraws.
Ah yeah, the pure casino faucets were always the problematic ones especially for those who would go for 990x or even higher. I think some removed but others made it remain, but with certain conditions that count for abuse. I think the problem as you say became a big one in 2017 when waves of faucet abusers came online and sucked faucets and casino faucets dry..
It was a problem probably on the first day that primedice started to open. I remember because unfortunately I was one of those people and I feel ashamed about saying this but I learned better and not doing it anymore, but when it first started they were giving 10k satoshi (wasn't a big money back then) and you could just refresh the page and it would ask for a new name which already had a generated account name.
So, there was scripts that refreshed whenever lost and stopped whenever it won, you could leave it when you went to sleep and when you wake up there was always at least one win, and you could withdraw. About 500k satoshi easily won every single night, better than mining for sure. They fixed it but this was literally primedice v1 the very first version, so it was always there.