Caffeine makes you pee, lithium is almost entirely excreted through peeing. Too much caffeine means you pee out too much lithium and you aren't getting the benefit of lithium. Sometimes the lithium dose can be tweaked to accomodate moderate caffeine use.

I drink about one cup of coffee per day. I take 900 mg of Lithium per day and my level is 0.67. So I am okay with some caffeine.

I think how much caffeine you can handle is individual. For some I bet it's easier to just not have any.