Question

Why, despite many criticisms of the federal grant system, does it persist?

Answer 1

The money is collected from many people and distributed to a few. The many tend not to complain about one program specifically, because it's just one among many, and itself represents a small part of their taxes. The few complain very bitterly indeed if their money is taken away, because it represents a lot to them, and they will press assiduously for more.