Why do they have to hand you the paper towels? Can't the customers grab them by themselves?
They don't have to, they just do so you don't have to get it or use the hands-free dryer. It's probably easier to get handed a towel by some guy when you are drunk than to reach for one. Plus it allows the restrooms to stay relatively cleaner because people are not taking too many paper towels and throwing them on the floor. They also stop people from having sex in the bathrooms.
They used to have dudes like that in fancy public washrooms waaaaaay back in the day. They would hand you a cloth towel, sometimes turn on the tap and shit. They would dust off your suit and make sure you looked good. They were usually black guys (this is before the Civil Rights movement but I'm sure they were around after for a while). If you've ever read Brief Interviews with Hideous Men, there's a monologue from a guy whose father was a bathroom attendant. In the film version it's done by Frankie Faison.