The thing that results in enshittification is market consolidation. Notice that Comcast sucks whereas there aren't a lot of complaints about Big Shampoo because that's a fairly competitive market.
If the government needs trucks then they should just buy trucks, not build a factory to make trucks and then another factory to make lead acid batteries for the trucks and then start mining lead to make the batteries etc.
At some point they have to interface with the market and you still have to solve the problem of keeping the market competitive and keeping the bidding process from being captured. If you're not doing those things then you're screwed either way; if you are doing them then it's better to just buy finished goods than to have civil servants manufacturing doorknobs and operating rubber tree plantations to make weather stripping.
I think that's true for widgets but it becomes much more opaque when it comes to digital services, particularly those that handle sensitive information. Sure there's govcloud and fedramp these days but if the US federal government had chosen to build that hardware out in house I think that would have been a reasonable decision. It's similar to private versus in house security personnel where there are arguments in favor of both.