Yes, hydroponics produces the best possible quality food that can be made. Being a closed system, it also doesn't require pesticides so it's essentially organic anyhow.

You are correct that Organic produce is the obvious immediate competitor. I wonder if hydroponically grown good can be labeled as organic. it could certainly come with no label at all.

As to whether there's a marketing benefit to actually being labeled as hydroponically grown, I've no idea.

As for subsidies, I assume that Organic food takes advantage of all of the same subsidies as non-organically grown food.