The role of the US State Department in determining what should be sold to whom should not be underestimated. This extends to British firms selling 'stuff' in the Middle East, with US Government obliged to ensure that Israel maintains a 'qualitative edge' amongst its neighbours. Thus State Department has levers it can pull to ensure that certain technologies are not sold to, say, Egypt or Saudi, for example.
Irrespective of the merits of the case outlined in the original post, anyone in the defence and security industrial sector has to be aware that there is very little ethical about manufacturing and selling arms - this has always been the case. Perhaps one of the more celebrated cases was the private action Krupps took against Vickers in the early 1920s, claiming licence fees for the manufacture of 18lb shell fuses fired by British and Imperial forces against the Central Powers. The case went to arbitration and Krupps (having just been depleted of most of its industrial capacity as a result of the Versailles Treaty) was awarded 1/- per fuse manufactured by Vickers. Zillions of these shells were fired. The payment was sufficient to put Krupps back on the map as a major engineering and arms manufacturer, just in time for the err, retooling of the Fascist forces in Germany.