In a world where you are highly sure of getting what you paid for. You don't seem to complain about Govt paying 800million for stuff that does not work, but about people getting paid what they would elsewhere.
There are a lot of intangibles in the world, and personal motivation systems are the battlegrounds for them.
Different people value different things. Trust me, that's okay.
A better healthcare infrastructure (I'm not saying healthcare.gov is "the answer," but it's the right direction) literally saves lives. What other definition of serving people can you possibly have?
In many ways I'm actually glad this situation exists: it has the effect of filtering out people that care more about their market worth than the mission.
People are motivated by different things. It is not better or worse to be primarily motivated by a salary that exists in one place, but, if you want a Silicon Valley salary, then perhaps Silicon Valley is the place that you should work.