It's not clear if this particular "invention" was developed for CIA, but there are also different types of government contracts, some of which assign IP to the government, some of which do not.

[IANAL]

My understanding is that the US Federal government cannot be sued for patent infringement. If correct, there would be no value for it to acquire patent rights and if the technology was to be controlled, classifying the design would be better than filing patents.

1) yes, you can sue the government or contractors fir patent infringement.

2) the government can issue secret patents

IANAL, but I was a government contractor for many years.

Secret patents that can be accessed by anyone with a high-enough classification?

It seems to defeat the original purpose of patents, which was to promote openness of inventions rather than secrecy.

Because if Big Government owned those patents then Job Producers wouldn't be able to make so many jobs for Hard-Working Americans.

(speculation)

They were probably acquired by VirnetX, like so many NPEs' portfolios are built.