1. They already have such offering (VS Team Services).

2. Their competitors (GitLab, Bitbucket) already have that offering.

3. I don't think they're interested in GitHub for its revenue, but for its strategic value. GitHub has to protect its revenue model by disallowing free private repos, Microsoft can afford to be more flexible.

4. They've already made similar moves. They acquired Xamarin, which was expensive, and made it free.