Agreed, the cost of living is high in DC and these contractors are the only game in town who are going pay a person big bucks to create poorly written HTML.
On a less sarcastic note, an average developer working for a gov contractor can receive a high salary which affords a very nice lifestyle in the DC area while still allowing them to save for retirement. This is something that is much more difficult to achieve or even impossible in the private sector. It's not surprising why defense contractors can attract fresh employees.