I agree with you that government is not great at picking winners.  They look at their revenue and decide whether it is worth the risk to try and save it.  I'd say they invested poorly here.  
If they never invested a dime, I'd bet that Bombardier would be in the same situation they are now.
As for your local government delivering the best value, you obviously live in a different area of the Country then me.  This depends on the quality of your local government.
Good government is hard to find.
Edit: I can't remember the timing of the Quebec cash infusion and the Delta deal, but if the deal came after, the cash infusion may have helped save Bombardier.  It's hard to know when we have no idea of the prior discussions with Airbus and whether their talks with the Quebec government gave them hopes they would no longer need to make a deal.
Just speculation.