I have considerable experience with this issue. For large requests, the granting entity will send a team. They check out the facilities, interview staff, and interactively dig through budgets. I suspect that there will be pushback about paying inflated amounts to publishers. Maybe the amounts are relatively small, but wouldn't PIs rather spend $50K or whatever on productive resources?

I don't presume to be aware of all the implementation details, but in the abstract, is this not a pretty excellent use of tax payer money? To support universal access to research, data, and educational materials?

Tax payer money is already funded to conduct research. Why do we need to pay 2000$ to host a PDF article?

You do not need to pay to host a PDF article, there are platforms such as arxiv.org or zenodo.org that do this for free for you.

Yes, but as others have said, professional advancement typically depends on publishing in the expensive journals. And that's no accident, in that predatory for-profit publishers have targeted prestigious journals for acquisition. It's the same game that drug makers play with top-selling drugs.

Eventually, authors will migrate to the not-for-profit open access journals and platforms. But that will take time. Top-ranked PIs must lead the way, given that their reputations are well established, and they have tenure.

Supporting research is an excellent use of tax payer money. But paying monopoly rents to publish? Not so much, I think.

AFAIK this is already happening in some fields, or is actually an individual line item in some grant applications.