if the government requires all publicly-funded research results to be public, a lot less people are going to take them up on the deal.
Non-sequitur, and you can bet plenty of researchers will publish publicly in order to get free money. What it will affect is private industry benefitting from publicly funded research and resources.
But if private industry profits less from the research, they will pay less for it. Pretty quickly you will see two exclusive sets appear: a little open research funded with a little public money, and lots of proprietary research funded with lots of private money.
I don't think it would be as complete as you imagine. There would be companies who would forego keeping results private to save the expense of building their own lab facilities and hiring people to run and work in them. That public resources can be used for private results is a back-door subsidy for commerce.
Non-sequitur, and you can bet plenty of researchers will publish publicly in order to get free money. What it will affect is private industry benefitting from publicly funded research and resources.