One should remember that even paying the Versailles indeminities to their full would have cost the Germans ~2,5% of their GDP yearly. Considering they spent a bit over 3,5% of their GDP on military spending 1913, the payment was entirely possible, as military spending went way, way down with Versailles.
If the Germans had actually complied with Versailles instead of forming the Schwarzer Reichswehr, cheating on tonnage, destroying their own economy rather than pay the reparations and so on, they could very well pay.
The problem is as
@Iserlohn says, the German people did not feel like they actually lost the war, and that the treaty was unfair, and thus politicians that fucked with it - even to the extent that it devastated Germany - were popular post-war.