There is no limit to inefficiency. Maintaining entrenched corporatist monopolies via corrupt regulatory capture is long run much worse for national security.
This is a pretty extreme position. That some inefficiency is necessary for national security reasons is about as close to settled as anything gets in economics/political-economy, though there's plenty of room to disagree over how much.
Inefficiencies beget inefficiencies. The money gained by those who benefit from the inefficiencies will be reinvested into developing more inefficiencies. Maintaining an efficient system requires constant vigilance.
The US is a precarious hegemon, for all of the inefficiency it has invested into the MIC it doesn’t seemed to have gained very much.
