Why didn't Gary Powers use the cyanide in the coin?

The real Gary Powers discussed this in an interview. The easiest answer is that he wasn't under orders to use the curaré (note, not cyanide) needle to commit suicide if captured. The hidden needle was an optional tool and was presumed to be used in the event of torture rather than merely of capture. At the fateful moment, he did what most sensible POWs do and just decided not to kill himself.

"Apparently a great many people were under the impression that I had been under orders to kill myself, come what may. But, as I had attempted to make clear in the trial, I had no such orders. I was to use the destruct device - which wouldn't have destroyed the plane, only a portion of the equipment - if possible. Under the circumstances, it had not been possible.

"I could understand why, not having been in the cockpit with me, some people might doubt my story. But when it came to the poison needle, there shouldn't have been any doubt. Since carrying it was optional, suicide was obviously optional too.

"It bothered me that this criticism was apparently long-standing, and that the CIA - although it would have been very easy to do so, without in any way jeopardizing security - had made no attempt to set the record straight by stating exactly what my instructions were. Instead they had let this misapprehension, damning as it was, continue undisputed."

The CIA also released the following statement at the subsequent Senate hearings

"STATEMENT CONCERNING FRANCIS GARY POWERS."

'The pilots...were instructed .... to be cooperative with their captors within limitations, to use their own judgement of what they should attempt to withhold, and not to subject themselves to strenuous hostile interrogation. It has been established that Mr. Powers had been briefed in accordance with this policy and so understood his guidance.

'In regard to the poison needle....it should be emphasized that this was intended for use primarily if the pilot were subjected to torture or other circumstances which in his discretion warranted the taking of his own life. There were no instructions that he should commit suicide and no expectation that he would do so except in those situations just described, and I emphasize that even taking the needle with him in the plane was not mandary; it was his option.'

Interestingly, this statement from his commanding officer Gen. Arch Hamblen seems to conflict with the accepted version of events:

... Powers carried with him cyanide, in a pen, which he was supposed to take in case he was shot down on the mission. The U-2 was built to fly higher - 65,000 to 70,000 feet - than any Soviet missile could reach. But his plane was hit and he parachuted out of the stricken aircraft. He could not reach the cyanide instrument - anyway, it was destroyed by the impact of the missile. The spy pilot was captured and put in prison.