Cashback or in other word lossback is actually better to be given without reaching certain level because a player may loss several thousands dollar but his wager amount is less than the minimum amount to reach the lowest VIP level to be eligible for the cashback.
Imagine someone (a new player) is losing $8000 but wager less than $10k, means that he is not eligible for the cashback/lossback while at the same time there is no rakeback so he does not get something back from the casino, it may make this player not interested to comeback with another deposit.
You got a good point. The casinos should think about it. If I am not wrong, I have seen some casinos like that. One of them is Metawin, which provides rakeback or cashback no matter your level. Probably, casinos think it is going to be expensive. But they should understand that since the player lost their deposit and their PNL is negative, giving them something back will keep themself on the platform. I used to see players screams on the chat saying a casino is scam because they did not provide any kind of cashback or lossback when they lose their deposit. The casino can avoid these situation providing cashback for every level.