I think we need to understand that there are two very distinct problems. One is compensation for a loss, such as the loss of a leg. There is a dollar figure attached to that, and that is normal. There is the civilian versus military debate. A price can be put on it, albeit very artificial.
The second thing is to make it possible for this individual to reintegrate into society. No amount of money, short of being astronomical, would allow someone to truly reintegrate, without the means to do so. Those means are especially difficult for a veteran, who has to leave military life and enter civilian life, which is vastly different in day-to-day living. The person then has to find a job, which can already be tough for a civilian. You can see there is another layer involved.
And that is what insurance is not good at providing. In fact, it is the insurance model. I am not saying that insurance cannot provide it, but, based on the economic insurance model, the second point is harder to achieve, generally speaking, and not just for veterans.