When the defense industry funds things they tend to go for architectures without a single point of failure and have the resources to create new things if the existing things are insufficient or adversarial. DARPA funding created the internet etc.
Meanwhile if you were to get the defense industry to not use your product, they're not going to go out of business or do less of whatever you didn't like. They're going to bring the same money to someone like Oracle or Microsoft with no qualms about taking it -- or bring even more money to them, which is your tax money, as those companies charge quite a lot.
This makes me suspicious that the people agitating for "don't take their money" are being subtly or not so subtly encouraged to do so by the people who want to take their money instead. After all, the historical norm is the opposite. Not just TCP/IP but Tor and SELinux and microprocessors and, considering that AT&T has long been a major defense contractor, transistors and lasers and solar panels and C and all the rest of it. Are the same people who want to refuse their money also inclined to refuse all of the other things it paid for?
Would we be better off if the University of California never took a Unix license or created BSD because of where it came from?