"Starlink is able to pay for itself, and doesn't need subsidies to provide service. Wireless ISPs are going to suck no matter what,"
You know Starlink is wireless, right? SO profit and suckiness are different things. Is Starlink usable and sufficient for most users?
Feel free to define 'usable' and 'sufficient' in a way that renders Starlink inadequate, but your low-end terrestrial ISP is excused.
By wireless, I of course meant cellular (and point-to-point wireless, to some extent), not LEO satellites. That said, the same limitations that make traditional wireless ISPs suck also affect Starlink; they're just not serving nearly as many subscribers, and their subscribers are far less mobile, and mount permanent antennas outdoors, all of which make a huge difference. But still, those limitations will eventually start to be a problem.
Starlink's main problem (and, indeed, the main problem with wireless ISPs in general) is the ability to scale to a large number of users per unit of area. There's only so much spectrum. At some point, as the number of customers increases, bandwidth per customer decreases.
Right now, with O(2M) users in the U.S., Starlink service is still good enough for most people, meeting the minimum legal bandwidth threshold for broadband (100 megabit down/ 20 megabit up) for downloads most of the time, in most places, but not always, and not in all places. And apparently it averages only about half the minimum for upload speeds, on average. Now ask yourself if it makes sense for the government to subsidize adding another 2 million people, which would likely mean halving the speed.
Also, paying to put in fiber objectively increases available bandwidth for decades, and possibly centuries. Even if paying money to subsidize Starlink results in an increase in the number of satellites launched, the satellites last only about five years, so unless the government is willing to spend that money repeatedly, any gains are likely to be very temporary.
Like I said, Starlink is great, and I love that it exists. It has a lot of uses, and it has the potential to revolutionize a lot of things, like Internet service on airplanes and cruise ships, Internet service in RVs, cellular phone service out in the middle of nowhere, and so on. And it can be good enough for basic Internet service right now, given the current subscriber base. It can probably handle a decent number of additional people in rural areas without causing too much trouble. But it can never realistically be a solution for the problem of poor urban neighborhoods having massively worse service than rich suburban neighborhoods, because it just can't handle enough customers per square mile, and that is unlikely to change in the near future. That makes it not a great choice if you're trying to figure out how to spend limited subsidy money, unless your only goal is to cover rural areas, and it probably doesn't make sense to do that, because they'll get decent Starlink service even without the government subsidizing it.