The point is that there is nothing you couldn't subsidize with tax revenue and thereby destroy the unsubsidized industry, so it doesn't serve as a useful test. You could have the government provide everyone with unlimited free coal and that would be the end of the private coal mining industry, but that doesn't mean we should do that.

The reason public tax filing software makes sense is that the government imposes this cost on the public so the government should collect the money to pay for it in the usual way (i.e. from taxes paid in proportion to ability to pay) instead of imposing a fixed fee on everyone.