I've read the news in the last couple of years but couldnt find it. It looks like the US goverment allowed installing and using Microsoft Windows in official facilities. It might be after -as you mentioned- unvealing the code to them.
But the idea of having an open source OS in hand seems crazy to me. We are seeing Linux sold this way since 1991 and I'm wondering how much represtent expreienced users in the potential market?! I bet they are few users, basicly geeks developping their own tools. Saying: "hey I'm happy cuz I have the original code and I can customize my OS the way I like" is not realistic in fact and this would lead to a bastardized OS
Anyway, we'd like to see more competitive companies making better and more reliable systems. Competition is something healthy because it leads to produce better products in lower prices and it pushs the developement beyond the existing limits. Take a look how Microsoft now is working hard to develop a new Internet Explorer after the threaten coming from Firefox. Internet Explorer was taking over for years and it made Microsoft lazy to upgrade it with new interesting ideas until Firefox toke 10% of it market.