First of all, let me say I agree it's a pretty ridiculous situation.
But my point was asking whether $6/test was the actual cost or not, and this shows that it clearly is not. He manufactured 500 tests from 1962 to 1963, for a total cost of $6000. He obviously was not counting the cost of the rental house or his own salary.
I'm not saying $262 was a fair price, but at the same time, we don't know what the ultimate low price would be for the privately manufactured test. As the story says, "There was no pricing provision, an omission that Guthrie later deeply regretted."
I find it pretty amazing that a smart guy would say "Hey can you guys please manufacture this for me, and I don't care what it costs. Here's an exclusive deal!"
In light of these details, I don't think this anecdote provides a very good case for your claim that private industry isn't as great as it thinks it is at cost containment.