Why do you attribute this to government? The federal reserve is a private banking system, to which the mint is beholding. They are no more part of the Federal Government than Federal Express.
Thanks to Woodrow Wilson, who pined on his death bad that he had doomed the nation, signed the Federal Reserve Act after it was passed with a minimum quorum during the senate Christmas vacation.
I would guess those perpetrators, now long dead, have their own demons to torment them. But their descendants are collecting the interest we pay for the money they create out thin air, from the income taxes collected specifically to cover our ‘debt’.

they don’t build additional space to store the dollars – though perhaps that’s why they stopped making them for circulation, they were likely running out of existing space.

the real waste is expecting people to use dollar coins when dollar bills are also produced. Just do one or the other.

This is more of a continued lost opportunity.
Starting with the Susan B. Anthony coins. The US MINT, in true, form messed up what could have been a success. (Canada did it right at the first go.)
The UK tested coin shapes and sizes, without designs, in preparation for decimilisation because everyone is blind, in regards to coins in pockets. Indeed 20p and 50p is distinct by shape alone, just as is the Canadian dollar.
Dollar coins would safe vast amounts of US tax dollars, IF politicians had the b***s to withdraw dollar notes.