It really isn't. Private institutions are under no obligation to collaborate with public agencies unless explicitly required by the Defense Production Act[0]. Please remember that the government is meant to serve us, not the other way around.
[0]: https://en.wikipedia.org/wiki/Defense_Production_Act_of_1950
To other government agencies, they may see github as a liability and end up leaving github altogether - I think that's the 'lunacy' part from a business perspective.
Corporations know there's always a chance that they'll get an internet pitchfork mob going after them for some (justified or unjustified) reason, and the last thing they want is for their cloud providers to pile on and further add to the fire.
What exactly is that message? Maybe:
"If you make your money by separating families, putting kids in cages, and deporting asylum-seekers to places where they're in danger, then we don't want your money."
Do you see anything wrong with that message?