If existing companies utilize cloud providers and CDNs rather than investing in their own in-house infra, doesn’t that signal to you that perhaps your analysis of the situation is flawed?

It’s possible the government is a big enough customer that they could get the necessary economy of scale to make it cost effective, but it also means that they’re going to need to develop a bespoke solution that all government services build on which itself is an expensive endeavor (and politically a liability since such a project can fail to deliver and just balloon in cost).