[jcranmer]

AIUI, this is the result as a compromise. Instead of the IRS creating its own free tax prep software, the existing tax prep industry had to make their offerings free for people under a certain income threshold.

Of course, the tax prep industry engaged in all sorts of dark patterns to make actually obtaining the legally-required-to-be-free software for free as difficult as possible, so the IRS is now working on its own free tax prep software (which is the Direct File system, not the Free File system).