Rebates are still only good for in-store use. The processing fee basically covers handling and not shipping. Someone still has to go and pick the items from the shelves in the store or receive the items from a delivery truck at the store and place them into storage and then retrieve them when you show up to pickup your order. A lot of hands and people had to touch your items to make you purchase complete when you clicked the "checkout" button.
Presumably these folks are paid by the hour whether or not they handle any pieces.