What stops the US government from doing the same thing?

Every chinese frontier lab releases their model weights and often more under FOSS terms (or more restrictive but still generally open terms).

If models for public inference use are required to be open weight in the US give or take some amount of limited fine tuning, then the US and China would be on the exact same playing field. Frontier labs would be pushing functionality for functionality's sake and would either be supported by govt funding or would be supported by domestic inference providers.

And then at the end of the day everyone is just either doing open research, is an inference, fine tuning, and training provider, or is the govt.

It's easy and straight forward and pushes everybody in the market towards common standards and interoperability.