Because the CTO does not have any legislative, policy, or regulatory authority. Their only job is to improve the way the U.S. federal government uses technology.

What's the fear, that their appointment will lead to a broken IT procurement system rife with conflicts of interest, perverted incentives, and no accountability? That's what we already have now.

How do you hire a qualified CTO for the US without having potential conflicts of interest?

If you know of anyone qualified for the position but yet doesn't work for a company then I guess I am wrong but having work experience is kind of a requirement.