Big Gov is just starting in the cloud, and Amazon wants the biggest piece of that gadzillion dollars. I can see a private wing of AWS running most of the military, for example.
[1]: From 2010-2015, the Washington DC MSA was basically the only large tech hub that lost tech workers, because of the Sequester and the constant government budget showdowns. Virginia viewed HQ2 as an insurance against that.
"Virginia tried very hard to make sure that HQ2 is not just more government contracting jobs"
Virginia can think whatever they want, but Amazon will do what it wants to do.
The objective is not 'contracting jobs' - that's not Amazon's business. The objective is to deeply entrench AWS services and products into government.
The amount of money - and especially the incumbency - provided to the winner of 'gov cloud' will be gigantic.
Defence and civie agencies spent $6.5B on cloud services in 2018, up 35% (!) from the year before, that's an incredible growth rate. [1]
This is going to grow like wild for some time, and that's Amazon's objective.
The lobbying/relationship efforts will be important as well.
Virginia is just the local government, they are actually not hugely part of the equation other than the specific incentives as you point out. Even the 'investment in education' is not hugely sweet for businesses, as the majority of workers won't come from Virginia anyhow.
The best thing Virginia can do is 'be a good government' - make sure the infrastructure, healthcare, schools etc. are well managed.
[1] https://www.nextgov.com/it-modernization/2018/09/federal-clo...