I've heard the government stuck with the Colt because they had a large stockpile/contract for .45 Colt ammo, and it was easier on the supply chain (and less costly) to keep the gun that could use the .45 colt ammo rather than switching over.

I think a lot of times government arsenal decisions are driven more by economic factors rather than ballistics or functioning of a gun (assuming the guns meet a minimum standard). It's the same reason the Russian government switched from the S&W .44 Russian revolvers (which they had tooled up to make the copies of at Tula), to the underpowered 7.62 Nagant revolver.

When the russians adopted the 7.62 mosin nagant rifle, they tooled up for producing barrels in 7.62. Since manufacturing wasn't perfect back then, occasionally they would end up with barrels that weren't perfect, but there were shorter sections you could cut off, and then turn down to use as revolver barrels. And then to squeeze the most power they could out of a whimpy 7.62 revolver cartridge, they asked Nagant to develop the gas-seal system.

I think people underestimate economic factors as a driving decision for government arsenal decisions. The most recent example we've seen of this is the XM17 trials, with the government picking the Sig 320 over the Glock because the Sig contract was cheaper.