No one ever gives anything away, not even the federal government.
If you think the $700 billion bailout amounts to a mere windfall for the idiotic risk-management practices of a few, consider: Banks must give the federal government common or preferred stock to participate in the rescue. No CEO wants to be the guy who took "free" money and further eroded shareholder value after an already lousy year, which issuing new shares or preferred would certainly do.
Bear in mind also that the government is actually getting something for your money in this deal: Mortgage-backed securities. Just because these assets are too toxic to trade (right now) doesn't mean that they aren't performing. They are. These assets might not be saleable, but they're still earning money. That's because most homeowners are in fact paying back their loans. The feds will use this cash -- billions of dollars in interest payments -- to either buy more mortgage-backed securities or simply to recoup our investment.
The government's main asset in this deal isn't cash, it's time. It doesn't have to please or at least placate Wall Street like public banks do. Uncle Sam can afford to wait things out -- and I wouldn't be the least bit surprised if the secondary market for these assets reappears. Soon.
I also think you'll start to see ads in the Wall Street Journal in short order from banks advertising the fact that they are NOT participating in the bailout.