You could say the same thing about the USPS v. FEDEX/UPS. Most branches of the government aren't in business to make a profit.
Agreed, particularly with regard to governmental activities that don't bring in revenue and can't be structured to be self-supporting - such as fire and police protection. These activities are almost always purely tax supported and the obligation of government leaders is to be lawful and efficient with the tax revenue collected to support these activities.
Other governmental activities bring in revenue and can be expected to be partially or fully self supporting. Public works (with water and sewer fees), EMS (ambulance fees) and government owned recreation venues (golf courses, swimming pools) are examples. At the federal level, USPS is a good example (now a separate federal "quasi-agency"). Of course USPS is the prototype of our esteemed Congress trying to run a business, as it continues to hemorrhage cash because Congress has mandated a specific level of service but restricts the ability for USPS to charge what is necessary to fund the level of service demanded by Congress. There are some interesting business arrangements now where USPS & FedEx packages are crossing over into each others systems, and I believe I recently read that FedEx wants to expand to Sunday delivery and they are looking at contracting with USPS to use the USPS infrastructure to do it.
In the military support sector, the exchange & DECA systems are interesting contrasts.
The exchange systems (AAFES, NEX, MCEX), are not dependent on appropriated funds & must break even to stay alive. Since they don't depend on appropriated funds, they don't have to reduce hours due to the sequester & don't have to shut down for the gov't shutdown.
DECA receives appropriated funds (although it also of course collects revenue from sales). For the most part, the role of DECA is to run grocery stores. With the possible exception of OCONUS bases and remote bases, you just can't make a sensible argument that running a grocery store is an inherently necessary government function. I'd probably buy that the government needs to run or assist with running a grocery store (commissary) on GTMO, but I just don't buy the argument that it's an absolutely necessary government function in San Diego, San Antonio, Pensacola or Millington. I don't know about "safe" forward deployed places like Japan - but they deserve a look.
I'm also not advocating a strict "government shouldn't do it if private industry can" position either. As a state university surgeon and medical school professor I'm a government employee (have been in one role or another all of my adult life). A private entity could provide the service my government employer does but so far none has stepped up to the plate so here I am.
I'm just saying let's look at the system & maybe send out an RFP to see if someone who does groceries for a living on a much larger scale than DECA can provide the same service at a lower cost than is currently being done using a government agency to do what is usually a civilian business. If the answer is yes, great. use the $ saved for something to improve the QOL of our sailors & families. If not, keep DECA & just accept that we'll have to subsidize DECA as the cost of doing business to ensure that our sailors & families have someplace decent to shop at places like GTMO & Vance where they probably won't find a Fresh Market just outside the gate.