I heard that Hitler wanted to bombarde cities like the Allies, but it didn't happen. Instead, the Luftwaffe remained on defense.
Well, the Luftwaffe did engage in air attacks against cities. Although the Luftwaffe's bomber arm consisted largely of medium bombers that were more useful for attacks against military targets, the Luftwaffe did make a name for itself attacking cities and urban populations. The bombing of Warsaw in 1939 was the first such attempt, albeit one that was very much extemporized by the Luftwaffe as it used Ju-52 transport aircraft as well as conventional bombers. There was the later bombing of Rotterdam on 14 May 1940 which was a carpet bombing of a major urban area. Later that year, the Luftwaffe engaged in a large-scale bombing campaign called the Blitz over the British isles. These nighttime raids focused on London, but also hit a number of other British cities between 1940 and 1941. The Blitz tapered off after the start of Operation Barbarossa and the Luftwaffe instead focused on hit and run raids over the UK for the rest of 1941. But the growing British bombing raids over German cities prompted a Luftwaffe response, the so-called Baedeker Raids in the first half of 1942. These raids targeted historic British cities like Bath in revenge for the RAF's alleged targeting of German cultural centers like Lübeck. These raids were an abject failure as they flew largely obsolete bombers against a British night fighter and defensive arm that was much more sophisticated than the one it faced during the Blitz. The Germans would repeat this performance in 1944 with Operation Steinbock, called the Baby Blitz. These nighttime attacks against urban targets likewise were costly failures.
Part of the problem the Luftwaffe bomber arm faced as the war lengthened was that it paid the price for a poor procurement effort. Ernst Udet, the head of T-Amt of the RLM (the Luftwaffe agency in charge of development in the Air Ministry) made a number of poor decisions for the follow-up generation of Luftwaffe aircraft. The net result was that the successor aircraft for the bombers Germany went to war with in 1939 (He-111, Do-17, Ju-88) were stuck in protracted development cycles or hopelessly behind schedule to reaching production status. The chaos of Nazi procurement and organization as well as resource bottlenecks meant that the Luftwaffe bomber arm had to soldier on with designs that were increasingly outdated. The Allied bomber offensive ensured that there was greater focus on fighter production, thus ensuring that the bomber arm was increasingly sidelined as the war continued.
The atrophying of the bomber arm though did not mean the Germans gave up on destroying cities from the air. The development of the V-1 and V-2 rockets were weapons designed to attack cities in much the same way manned bombers did. The German manned bombers did attack urban targets when the conditions were favorable, such as during the 1944 Warsaw Uprising.