What you say is basically correct, but remember that this profit, and all other QQ costs, only comes from one place – the Defence Budget.
But that is completely misguided, as without the profit incentive, it is not only a proven fact that organisations will waste money, but one that has been proven time and again with formerly state-owned enterprises shedding fat and providing better services once they are subject to competition (except the trains).
Essentially prices charged to the defence budget will be lower even with the profit incentive, as formally bloated areas that have no commencial justification are wiped out - for example swathes of management eliminated from BA since privatisation for example.