The "NSA run CERT/IDS/etc." is obviously problematic, but I'm pretty happy to have NSA/NIST advising on algorithm selection, as long as the algorithms also are liked by the open community (giving NSA a veto, even a secret veto, seems fine as long as there are enough options.)
Within the government, there were a lot of big pushes through the 2000s (and to today) to do things like disconnecting government from the commercial internet except via specific gateways, get host based intrusion detection on all DoD computers ("HBSS"), ban USB keys (after the Russians started putting nice factory shinkwrapped ones full of malware in the on-base markets in Afghanistan...), etc. I.e. bringing government up to the level of a well-secured private organization.