The cooling of the cannister is caused by what is called the heat of vaporization of the fuel mixture. This heat (of vaporization) must be added to the fuel to cause it to change from liquid phase to burnable vapor phase. The heat for vaporizing cannister fuels comes from the stove surroundings including the cannister as well as the fuel itself. Cannister stoves don't work as well in cold because the heat required to vaporize the liquid fuel is less available. Warming the stove with your hands or some other heat source simply provides more heat to vaporize the fuel allowing the stove to work better.

The lower atmospheric pressure at high altitude will also lower the fuel vapor pressure and thus the heat of vaporization but this only helps significantly with the more volatile fuel compounds.