Presumably, because DARPA is funded by tax dollars and it would be embarrassing to have these go overseas; also, because the military may want to hire the people who made this, and getting a high security clearance for foreigners is a headache.
What would be a good reason?
Also, quite possible that your research money goes farther. If this produces greater progress per dollar, this might create greater security. But this might depend on whether you are developing offensive or defensive tools.
Citation on your point 2. Where does it say anywhere that Government can only spend it's money on employing Americans?
I understand that what made American great is its ability to use talent from other countries, honestly US does NOT have the best scientists or engineers but it offer to the best mind the opportunities to shine, opportunities that we don't have in my country.