TARP didn't wipe out the massive losses the banks suffered because of financial crisis. It just allowed them to survive it. The banks who really fucked up were all sold, essentially at gunpoint, to banks who were still solvent. Those banks were sold for pennies on dollar compared to what they were priced at months before.

Of course, without government intervention, they'd get nothing in bankruptcy.

I think losing 95% of your investment is enough to avoid huge moral hazard.

Society benefits because letting them fail sinks the economy much further.