The reply was really to bring to light that a "service" business isn't equivalent to a business which doesn't make money or profit but only incurs cost.
Your construct of choices is limited and artificially narrow. If others charge $14 for a letter and people pay it, why shouldn't the USPS charge market price for it, too? To expand that notion a bit, why do we use FedEx and other courier services when the USPS is far cheaper? What does that say about the confidence or efficiency of the service USPS provides? And since we are talking about price for delivery, why does a letter I drop of at the post office require a stamp to be placed inside a PO box in that same post office???
In my rural area in TN, the postal workers could move away from a delivery every day expectation to a delivery every 3 or 4 days with zero impact on my life. If the workers could rotate between 3 or 4 service routes then several employees could be let go and the USPS could take a step towards better financial security.