Subsidies have the same problem if they target a class of recipients. If they target recipients directly, then we are simply in crony capitalist land where politicians' friends and doners get competitive advantages and risk monopolization.

It also creates an incentive structure that can have toxic implications for the company and products, since the government is effectively a customer, but the product being purchased is subsidy qualification -- potentially at the expense of the laborers or customers. Imagine if your product manager had to take the politicians' product whims into account when prioritizing your backlog.

Edit: my political commentary: this is the fundamental problem that converted me to conservatism from center-leftism. I believe it's not possible to create an equitable structure and a level playing field while the government meddles in the economy.