Well, I agree with you that if your gov't is screwing you around re: SRS that you should probably just try to go private. But the NHS SRS scheme isn't really "free"; it's paid for by tax dollars, and if the promise is made that SRS is covered, it shouldn't be so hard for people to actually access. From my point of view, it's a good thing, at least in terms of a safety net: if you really can't raise the money to get surgery privately, then the NHS is great since it's an extra chance (one that doesn't exist for transpeople in other countries).
For American prisoners, yeah, it's really not fair for the gov't to pay for SRS when law-abiding, non-incarcerated people don't have access to that right (if it were true, I might have to go out and wreak some havoc!). When there's a national health plan in America, then I think it would be fine, but not until then.
Lia