If doing it lowers the cost of earth movers and gets 20 other groups to each dig their own ditch, that's actually money well spent.

No, it depends on what else you could have spent the money on. Perhaps that would have been even better?

This is a typical argument for state intervention in the marketplace, but it is weaker if one makes different assumptions about the state of the market absent the intervention. In order to show that it was money well spent, you'd have to show that it's better to have more groups digging, and that there wouldn't have been enough diggers without GovDitch.