As ever, Whenurhappy has hit the nail on the head. The problem is not whether or not we are called public servants; the problem is that PUS, the top civil servant in the MOD and the person who is CDS's 'oppo', seems to imply that she feels that Service personnel have no special claim to consideration above that over any other government employee.
This flies in the face of the military covenant which specifically recognises that because they may be called upon to kill and die for their country, Service personnel require special (albeit not necessarily preferential) consideration.
For someone who was 2nd PUS for 2 years, and is now PUS, to have not yet grasped this fundamental notion is worrying. If only it were some 'Doris'...