Because post is more than just letters, it's parcels too. Canada Post is infrastructure that ties the whole country together, not just the denser, more profitable cities. Imagine if there were only for-profit postal services in the country. What would it cost to send a parcel to 100 Mile House, or Baker Lake, or whole swathes of the country that only speak French? Think of all the things that go out by post, like Carbon tax rebate cheques and voting information. It'd introduce a massive disparity in service and access to basic services, and so we socialise that cost across the country.

There are always ways to improve of course, but you asked specifically about why the system was socialised.

Support cheques (direct deposit is optional for practically everything).

Sending official, original documents (anything related to passport applications).

Physical copies where required by contract (things like Strata AGM packages, some loan/investment documents).

The days of regularly sending your mom a handwritten letter are surely gone, but there’s still enough need for a postal service to exist.

I think where they really fucked up was with the junk mail. They got drunk off making money delivering pounds of paper advertising every day, and as people grew to hate it and opted out, and as businesses saw it wasn’t worth it, all of a sudden the junk mail side hustle no longer subsidized the cheap postal fees.

You're not "subsidizing post". Canada Post is a completely separate entity that generates it's own revenue. They don't receive any money from the government.