Intuit's lobbying isn't limited to opposing return-free filing. They also lobby to keep the tax code at a certain level of complexity that puts the most Americans in the sweet spot between too complex to feel comfortable using software and too simple to need software.
FWIW, the reason that Intuit believes that return-free filing is a bad idea is that they believe that you need someone who advocates for the biggest refund/smallest tax bill and the government isn't in a position to be that advocate since its revenues depend on tax collection. I don't generally agree and this sort of lobbying was the one area in which I questioned Intuit's "Integrity Without Compromise" core value during my time working there, albeit not on TurboTax. However, I did meet many people that did work on TurboTax and they all believed this strongly.
As the Sinclair quote goes, "It is difficult to get a man to understand something, when his salary depends upon his not understanding it."
Intuit has a $3b/yr interest in thinking that return-free filing is a bad idea. I think this country would be better off if people didn't have to spend that money and the inordinate time commitment that filing taxes currently consumes. And I think that Intuit not believing this is a rationalization of the need to protect that revenue stream.
As someone who was employed by a company that was acquired by Intuit, I've been very conflicted about my own good fortune being connected with Intuit's activities in this area. About 6 months ago, I decided to divest all my Intuit stock, not because I felt it wouldn't perform well, but because I don't want to be making money off what I see as unethical behavior. Intuit is, in most respects, a very ethical company. But in this one area, I don't think they are.
FWIW, the reason that Intuit believes that return-free filing is a bad idea is that they believe that you need someone who advocates for the biggest refund/smallest tax bill and the government isn't in a position to be that advocate since its revenues depend on tax collection. I don't generally agree and this sort of lobbying was the one area in which I questioned Intuit's "Integrity Without Compromise" core value during my time working there, albeit not on TurboTax. However, I did meet many people that did work on TurboTax and they all believed this strongly.