I didn't really "get" war machine anyway.
So Rhodes can wear it without arc reactor planted in the chest?
Should all the suit tailored to Tony (Me and my suit are one, handed over to the government would be.......), which has the arc reactor which drives the unibeam.
Moreover, WM is based on Mk2, should it be using paladium, which will be degraded over time (not to mention killing the wearer)?
In the Avenger, I see no US military involvement? Everything is SHIELD, even the nuke is coming from the flying fortress. The only government involvement that I see (if I remember it right) was the police officer trying to blokade some blocks in the city.
So no wonder WM was not involved.