I think the lack of internet cafes that you mentioned is more about lack of demand than German trading laws. The interenet cafes in every village that you mention in places you've travelled in Asia - which I've also seen in India - are at least as much patronised by locals, who can't afford their own PCs at home, as by travellers. I stayed for a week in March in a remote village in southern India, where the grandmother of the friend I was staying with said I was the first foreigner she had seen in at least a year, and there was still a busy internet cafe right across from the bus station. In Germany, on the other hand, most people have home PCs and lots have semi-broadband (ISDN or DSL). The traveller market alone probably isn't enough to support many businesses. London is different (loads of tourists and broke foreign students), but I haven't noticed many internet cafes in other British cities either.
The discussion of India, and how internet cafes are used by locals, is quite interesting. One thing that I have found in other parts of the world is that the nature of internet cafes does vary from place to place. In some places, you might describe what you find as "technology cafes" instead. In Bali late last year, I frequently ran into what could be described as "Playstation Cafes". Clearly, a Sony Playstation is too expensive for most Balinese to be able to afford to buy. However, it is cheap enough that it is possible for a business to buy one or several and then open a shop in which people can come in, pay a small amount of money, and then play some games for a while. In a situation in which the capital costs of buying a Playstation are high relative to your other costs, a situation where people can rent its use maximises the number of hours a day it can be used. In a western environment, the cost of a Playstation is relatively low, and it makes sense for people to buy their own and only use them for only an hour or two a day. Just disregarding the convenience factor for a moment, the other costs of running such a business in the developed world are much higher than the costs of the Playstations themselves, so these types of businesses don't exist.
Another thing I have seen (mostly in middle income countries, or in middle income suburbia of richer countries) is what could be described as a "broadband cafe". Essentially this is an internet cafe where the PCs are state of the art machines with graphics cards, have high speed LAN connections to one another, and higher speed connections to the internet. Essentially these are places where teenage or twentysomething men can come and play Counterstrike or other networked computer games. I have found these in shopping malls in the richer parts of Johannesburg, in shopping malls in the bleak, apartment building suburbia sections of Singapore, and in Istanbul. (Plus they famously exist in large numbers in South Korea ). These seem to be based on the same economics as the Playstation Cafes in Bali. High end PCs with broadband are expensive, so it makes sense to rent their use by the hour.
On intenet cafes in Hamburg, while I am sure that Alan is at least partly right - I am sure it is easy to find an Internet cafe in somewhere with more tourists and a more transient population (Berlin for instance) - I am still not convinced that an absense of local users is the whole story. This year I have looked for internet cafes in Singapore, Istanbul, Amsterdam, Brussels, and now Hamburg. In Britain I have looked in London, Brighton, Cambridge, Bath and Bristol. In all of the others I have found them without difficulty just by walking down the street and looking for one. Most of the above are tourist towns of varying degrees, and I shouldn't expect the same number of internet cafes as in London or Amsterdam, but is Hamburg really less of a tourist town than Bristol? (It's certainly a much bigger city than Bristol). In London I have found internet cafes in suburban areas where few tourists ever go, too. Okay, it may just come down to just bad luck on my score, as Hamburg actually does have internet cafes and the issue was simply that I couldn't find them. But I am still not entirely convinced this is the whole story. Perhaps I should reclassify my suspicions to it having to do with german labour and business laws being inflexible in general, rather than trading laws specifically.