>If you're going to pay that amount, why not just give the parents the money?

Because having each parent have to go to a privatized daycare utimately costs more, for a worse service than it being a public service. It also reinforces social segregation, where wealthy parents can afford to put their children into the fancy daycare, while poorer ones either don't (which is horrible for the children), or have them in run down, overcrowded day cares.