>It doesn't really make sense to do that with domestic software and to give imported software a free pass.

Yes but what is applicable are domestic laws that can differ from country to country. What really would not make sense would be for an international treaty to restrict what a country can do with its own software in that country.

> Why does it need to be a country? The domestic software maker whom the government forces to do something that is not allowed under the treaty should have standing.

Because the parties in this agreement are countries - and the terms in the treaty provide remedies for businesses and individuals who are infringed by another country that is a party to the treaty. You are not a party to this treaty with your own government.