The real lesson here is that almost all modern SaaS applications have massively under invested in customer support in order to appear more profitable or sustainable than they really are. One of the major factors behind LLM development is trying to solve this problem before the house of cards falls down. Companies were enticed by the recurring revenue of SaaS, but don't want to pay for the level of support required when you are responsible for all your customers data as well as their access to the service.
Why would a government division (or any 20-person office) pay a reseller?
That's a feature of any SaaS. Adobe frequently shuts down ETLA customers due their own invoice processing failures. I can think of three significant government subdivisions that were unable to access any M365 service for 1-10 days as a result of a reseller change.
The real lesson here is that you need to understand the failure domains of the technology your business depends on. Your business is as good as the contracts you rely on. We're relatively good at preparing for IT failure, but not so much the other stuff. For small businesses, key revenue generation could be stopped by an employee doing something dumb with a corporate card.