Well, yeah. Once you delete the initial subsidy (I sure as hell can't swing an interest-free loan, nor can I force land sales at gunpoint, nor can I just make a sweetheart deal with the statehouse for their lands, nor can I simply rewrite a treaty with the local Indian tribe at the drop of a hat), it makes a profit.
If they had to pay market prices for the land AND the loans, this thing would have gone broke in a few years.
Like I said, the plaintiffs' case reduces down to "it may be unconstitutional as hell, but it's OUR pet unconstitutionality, so we ought to continue deriving the benefits thereupon."
I don't mean to imply that the problems in Klamath are small by saying Klamath is a small picture, but the big picture problem is the continued expansion of Federal Reserved Water Rights.
Judicial Activism in the last half of the 20th century has created a 800# gorilla that can trump any pre-existing water right. It has created much uncertainty thru-out the west. Those Klamath water rights are a 100 years old. There are some threatened rights that go back to the Spaniards.
Babbitt said: "If we can control the water, we can control the West".