The defense part of Boeing used to be a separate company (McD). DoD could easily let commercial fail and spin out McD again, or just shrink to defense only. For a long time, Airbus has claimed that the DoD spending subsidizes the commercial side. So TBH, letting commercial fail would result in more bang for the DoD buck.

Regarding military activities, I don't doubt that there are engineering synergies between commercial aviation and military aviation. However I've always heard that from a commercial perspective the two are at odds: for a defense organization you want to make sure to keep as little cash on hands, as it's fairly easy to ask for more. There are always scope changes, delays and shit happening. The last thing you want is to have a war chest that your customers will ask you to tap in to cover the costs of contradictory requirements, feature creep and original underbidding to win the contract. See the A400M as an example: the civil side of Airbus is coughing up quite a lot of cash for that clusterfuck.

On the other hand, developing civil airliners requires cash. A lot of cash. You can't ask American Airlines to cough up some extra cash because your 787 is delayed and is costing more to produce than anticipated. In fact the opposite is true: because your 787 is delayed, your customers will pay much less, and only when you can actually deliver the product (for the most part). Bombardier didn't have pockets deep enough to sustain the CSeries...