I was under the impression that thr US Military doesn't use GPS; that it was a civilian thing and that they had something more precise and secure.
Parts of the GPS signal are encrypted to be only useful for the military. The result is that civilian systems an average 4.9 meters of accuracy, while the military is precise to something like a meter instead. But that extra accuracy doesn't help if the signal is jammed.
I remember the capability coming as a surprise in 1990, but you're right that Reagan announced that civilian access would happen back in 1983.
Now I don't know if I was misremembering, or if Iraq was simply unaware of the technology, or whether that announcement was for access at some future date.
I do remember discussing GPS on sci.physics in the mid-90s though. Where I learned that GPS is the only commercial technology that has to take general relativity into account. Clocks on Earth run measurably slower than clocks at the altitude of GPS satellites, and the effect is big enough that GPS has to correct for it.
Looking back at the history, the tanks began to go into the Saudi desert in August of 1990. They then launched their massive assault on Feb 24, 1991. And caught the Iraqis completely flatfooted. With the tanks moving faster than the news of the tanks for several hours.
Before KAL 007, GPS was unaffordable to most users, and not widely developed commercially because there was still uncertainty about whether it would remain available in the long run.