Interesting observation and quite true.

I believe the government pay is at the bottom of the proverbial barrel and only those who are least qualified will take such positions.

Furthermore, once they have the position, they are relatively secure and are very unlikely to be terminated for mediocre performance, so, why work harder than necessary?

From the arrogance standpoint, that must simply be due to the absolute power they possess without the requirement to satisfy their "customer" in any way. In effect, they have an adversarial relationship with their customers...........a situation that can only work for the government.