Paper can't provide binaries as it would infringe Mojang's copyright. Users must "build" the server by downloading the official binary and applying local patches. This is well-automated for users.

Licensing wasn't so much a problem in the early days of Minecraft. The first really popular server mod (CraftBukkit) not only provided binaries, but deopfuscated server code on a GitHub repo (since DMCA'd): http://github.com/bukkit/craftbukkit. That repository was ostensibly licensed as LGPL, but no one really believed that, given it was derived from Mojang's proprietary binaries.

Mojang eventually acquired CraftBukkit and hired their devs. And there's an interesting footnote: for several months, Mojang didn't tell anyone they'd acquired CraftBukkit, and they kept making releases to the public GitHub repository. Given it was Mojang making these pushes, I believe (IANAL) that they are officially-licensed LGPL versions of the Minecraft server, albeit ~10 years out-of-date now.