I wouldn't hold a company as anti American or anything that refused to do business with the U.S. government. There are plenty of other valid reasons such as:
The federal government always takes a long time to pay. It can be up to six months after you deliver the product before they send the check. Unless you are selling special designed $600 dollar hammers it hurts your cash flow.
Paper work reporting requirements are costly. I know more than one business that folded after they failed to read and understand all the fine print in the contract. The feds will withhold payment until you comply with all the paper submittals and they can be complex. If you think your income tax return is burdensome, then try adminstering a federal contract. When I used to propose defense contracts we always added the blurb, "to comply with FAR and DAR" in the proposal to justify costs. The Federal Aquistion Regulations and Defense Aquisition Regulations contain thousands of pages and dozens of volumes that in turn reference other government regulations and specifications.
No Joke. The old specification for fruit cake used to get faxed around for laughs. It was 26 pages long and had required dimensions for the dried fruit particles.
When I used to farm out, "out source" defense contract items I was always careful to warn new vendors. "Your books have to be clean and well documented. All it takes is for one bad audit and you could loose everything you've worked for." The profits are there, but you have to play the game by their rules or you loose.
As a long time Purchasing Agent and former Small Business Liaison Officer for a Govt. contractor, I remember laughing at some of those specs, including the one for gravy. Way back when, I used to have to look up mil-specs on the microfiche machine. We finally got rid of all of our repair contracts with the close of Kelly AFB and now deal strictly with the R&D side. In recent years, the Air Force tends to look more towards the .coms for off-the-shelf purchases of components, which can also be frustrating as most of them will only accept prepaid orders and we usually operate on N/30 terms. Recovering our money from the AF is a whole other story...
On another note, I tried to send flowers to my mother-in-law at local Army hospital and was turned away by several florists. They said it took their drivers 2 hours to get through security and it was therefore not worth their time to process those orders. That is another consideration most people don't think about.