And companies absolutely have the right to dictate terms. The idea that the DoD has the unilateral authority to do whatever it wants is literal textbook fascism. It's never been the law in the US and it should not be now.
Seems very straight forward.
Anthropic said "don't use our products for targetting decisions in military ops". The DoD could have easily said "actually then, we won't use your products at all". Instead, the DoD said "either you let us use your products in targeting decisions, or we won't let you sell to anyone who sells to us for any purpose, using a law that only applies to adversaries of the USA".
Everyone keeps parroting this despite it not being true. And you're missing the point. The DoD specifically doesn't want it in their supply chain at all because it's an intelligent system that will work against the DoDs goals, by design, in certain scenarios.
Your argument boils down to, "The DoD isn't allowed to not want Claude in their supply chain", which is crazy.