You can't imagine the French government allowing Renault or Citroen to go bust or the Germans BMW, Audi or Daimler, can you? So how seriously does the government take manufacturing? Not very, as we all know.
I don't see what more the government can do. They've offered big injections of cash, they've tried to broker a deal with the Chinese car company... If a private company cannot compete and goes under, it's not the government's responsibility to keep it afloat any more than it is anyone else's. I think it's pretty good that they did as much as they did.
Why should the workforce get screwed over for management's incompetence (and squirreling away of large amounts of cash from the company, from some reports)? And if Rover cars really can't be sold, turn the production lines over to something useful, like public transport.
[Irouleguy] Exploring the possibilities of keeping the business going is precisely the administrators' job. But in the end, if they can't find anyone who wants to run it and has a credible business plan, it goes under. That is unfortunate for the former employees, but losing out when the people you work for fail is one of the risks of any sort of employment.