All very valid points. To be sure, my model is only valid when there is good reason to expect competence and motivation to correlate and when firing is relatively difficult. My only (possible?) disagreement is that I think “lawyers with no serious option at better than $61K/yr” wouldn’t generally become public defenders unless they also happen to be very motivated by the position itself, because other law positions paying $61k have a lower workload, stress, etc.
It’s true that government jobs tend to be more secure, but I don’t think this fully explains the low salaries of public defenders (though this is just an intuition).