Not letting Boeing grab McDonnell-Douglas military projects might have stopped some of that, but it might have also accelerated it.
Basically, allowing it to merge with its largest competitor was the worst possible outcome for competitiveness and long-term health of the industry.
More to my point, though. There's no real reason our existing anticompetition laws should not have been enforced here. Our culture of selective enforcement of laws is a cancer that manifests in all kinds of negative ways. I strongly advocate that we move towards being a society governed by written laws.
Bankruptcy is a legitimate option -- many companies with productive assets survive and thrive after restructuring. Even a liquidation tends to preserve functioning assets.
Regardless, the larger point stands that it's bad, actually, for the US to selectively enforce laws. In particular, anticompetition enforcement has been notoriously lax for a generation. Hard to make an affirmative case that regulators should continue to ignore existing laws the way they have been doing.
Which is kind of the idea. You then have Raytheon or Lockheed serving the part of the deep pocket who takes possession of their infrastructure instead of handing it to their only competitor. That company may then notice that they're in a position to take a piece of the huge commercial airliner market if they would make an R&D investment into the thing they just bought, and unlike MDD, they have the resources to do that.
Conversely, the buyer isn't interested in the civilian market at all and only buys them for the military assets and sells the civilian infrastructure at fire sale prices to whoever will take it. That still isn't allowed to be Boeing so you now have someone getting a couple billion dollars worth of infrastructure for 10% of its original creation cost, and that make them a viable company because they're starting off ahead by a large amount of capital infrastructure they didn't have to pay the normal price to get.