1. We still do. That was a nascent effort, not some built up military industrial complex and it still exceeded all rivals at the time.

2. Why? Being a supplicant to a bully.

Do you think it could have been bribery? Lockheed and Boeing have a history of doing so, both legally and illegally. That time a porn-star 9/11'd a yakuza's kitchen was revenge for this.

one abusive superpower to another

So don't put yourself into a situation where either can force abusive terms on you, not that China's terms have been abusive, as evidenced by the development of countries who take chinese loans vs the eternal "developing" of countries which accept western "help". I'm not even advocating entering China's sphere, just having the threat available that the US can't push any terms with no fear of consequences.

Chinese goods are cheap because market function and the profit motive was not of central concern

Correct, building the means of production was. Now they've done that, one unit of labor goes a lot further when you're regularly setting up complex, automated assembly lines in days. If market function was the central concern, China would look like India or Africa; still exporting cheap resources and labor while your own people starve.

human rights, labour rights or environmental rights

Maybe 25 years ago when they had children working in machine presses and rivers that turned funny colors, it's a different country now.

We could build nukes in a year

I don't know if anyone's ever set up plutonium extraction and refinement that quickly, even if you had design documents for the nuke itself.