There were certainly some compelling arguments made in favor of this approach — not the least being that it's a highly cost-effective way to provide improved services to taxpayers who ultimately foot the bill for government IT efforts. As an investor in government IT (I pay taxes), I'm fully supportive of anything that improves services and reduces costs!
One of the most memorable quotes came early on from Carl Malamoud when, in his opening keynote, he suggested, "If we can put a man on the moon, surely we can launch the Library of Congress into cyberspace." (See his keynote below).
On September 7, 2010, US Federal CIO Vivek Kundra (Office of Management and Budget) joined with Federal CTO Aneesh Chopra (Federal Office of Science and Technology Policy) and Bev Godwin (Director, Center for New Media and Citizen Engagement, U.S. General Services Administration) to announce the launch of Challenge.gov at the Gov2.0 Summit.