It's not theft. In fact, many companies are started this way. As long as they negotiate a contract that retains or licenses code use, they're good.
Businesses do this to each other all the time. Why should Government be special? I don't believe the software would have been written in the first place if your idealistic regulations were in existence, and the people who'd be at a loss would be.... the taxpayers! If the service that way paid for was delivered and the contract made the proper stipulations, this is all fine and dandy.
Also, "we the taxpayers own it" if it's open-source is also not true. If the BSD license was put to use, for example, then any company could go off and make money using the source code.
Businesses do this to each other all the time. Why should Government be special? I don't believe the software would have been written in the first place if your idealistic regulations were in existence, and the people who'd be at a loss would be.... the taxpayers! If the service that way paid for was delivered and the contract made the proper stipulations, this is all fine and dandy.
Also, "we the taxpayers own it" if it's open-source is also not true. If the BSD license was put to use, for example, then any company could go off and make money using the source code.