You are almost on point here, but seem to be missing the primary point of my work. I work as a researcher at a university, doing more-or-less fundamental research on topics that are relevant to industry.
As I wrote: We develop our libraries for in-house use, and release the to the public because we know that they are valuable to the industry. If what I do is to be considered "industry subsidies", then all of higher education is industry subsidies. (You could make the argument that spending taxpayer money to educate skilled workers is effectively subsidising industry).
We respond to issues that are related either to bugs that we need to fix for our own use, or features that we ourselves want. We don't spend time implementing features others want unless they give us funding for some project that we need to implement it for.
In short: I don't work for industry, I work in research and education, and the libraries my group develops happen to be of interest to the industry. Most of my co-workers do not publish their code anywhere, because they aren't interested in spending the time required to turn hacky academic code into a usable library. I do, because I've noticed how much time it saves me and my team in the long run to have production-quality libraries that we can build on.