There are multiple private companies providing this service for low amount, as many have mentioned; for free for incomes below a threshold.
1) Why would you want the IRS to duplicate this effort and compete with these companies? Remember 'Free' in this context means paid for by tax dollars. Do you think the IRS is going to spend less to implement a filing system than one of the existing vendors has? If they do it in-house, do they even have the expertise? If they contract it out, is that much different from what we have now?
2) Everyone needs to file state taxes anyway. Seems unlikely the IRS is going to handle this, as it adds a great deal of complexity and isn't really part of their mandate. So if you create a free IRS filing system, then people still need to go to one of the existing vendors and import their info and pay to file state taxes anyway.
There are good reasons to think the IRS creating a system is a bad idea. Blaming passage on a few $K in lobbying is lazy.