If there were a way to efficiently manage 2.5 million staff in a single department, then we'd likely do that, but it's more efficient to specialise, so we do that instead.
Firewalling data between departments is rarely a design consideration, except in obvious cases (military), and it hardly matters in this scenario anyway, because it's not like Musk is walking into all 400 agencies with a laptop. DOGE is hiring an army of advisors and dividing them up between agencies.
It would truly be a nightmare scenario to have all government databases under a single potentially corrupt roof or having someone with access to all of them cough.
You seem to be making the analysis based on first principles, but it looks like it’s inspired by some facts or experience you have. could you share that source /info?