why should the environment be germ free?

Depends on the environment you are talking about.

If you are talking about an environment in a test lab, or in an operating room, it should be germ free to prevent infection or contamination.

If you are talking about the environment in general, then freedom from germs would quickly cause the death of most, if not all, organisms. Germs are invaluable for many processes, such as the decaying of dead matter, the fixation of nitrogen (an essential process: without nitrogen compounds, nothing can live) and controlling each other.
 
Kumonfo had a good answer
For just a bit of further thought, consider the following:
There is a bit of semantic messiness here. While the word germ may be used to describe the virus or bacterial cell that can give rise to disease, it can also be used for the beginnings of an idea, or for something like a fertilized egg. In these latter senses, germs make the world thrive.
You can do the same sort of thing with the word environment.
 
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