NASA’s cost of failure in the past was significantly higher, and their development lifecycle was designed to support this. SpaceX’s cost of failure is orders of magnitude less, and their development model is designed to support that. They can throw all the money at the development of the system they want. If they were too in the hole between private investment, Starlink proceeds, and yes, government contracts, they would go bankrupt.

SpaceX is still hitting the milestones on their NASA contracts, which were awarded well before the work started. How much it costs to reach those milestones is not a factor the government cares about. By definition, this is not a bailout or waste of taxpayer money, as it was fairly competed on the open market, and approved by the congresspeople who were voted in by the public.

On the other hand, if you think the entire Artemis endeavor was a waste of taxpayer money, that would be a more fair argument, but that has little to do with any SpaceX hardware failures.

Edit: corrected some misconceptions on initially proposed milestones. Engineering lifecycle points still stand.