At the end of the day, the whole idea of "art" is fundamentally bourgeois anyway
Art being "bourgeois" is not a defining, but a descriptive characteristic that was true only at a certain time. It's the same when Marx described the proletariat as extremely poor, and now many idiot-"marxists" think that it was a definition. The proletariat is defined by its source of income, nothing else. Today the working class isn't poor anymore, and as such they can afford to consume art as much as the bourgeois could way back when.
Putting it in a quick trope, let's say if we leave art to commercialism, you get a lot of "sugar art" - art that serves runaway instincts towards degeneracy, especially among the plebs. But in and of itself, would that be a problem? The liberal hope was that eventually people will become dissatisfied, learn and seek more elevated stuff. Is that wrong? What prevents such a learning process from happening?
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You have to ask yourself, would the plebs really be elevated by having art they wouldn't buy anyway thrust upon them?
It's a liberal lie, not a liberal hope. It's the same idea that "democracy" works.
Society is not equipped to make smart decisions regarding complicated matters. The more labor becomes specialized, the more people only know one tiny thing. They can't also be excellent historians, philosophers, ethnographers, economists, etc to make decisions on foreign policy or internal economy.
Society is not equipped to form coherent demand for art, either. Society's interests are formed by objective needs or through manipulation. The latter is what forms most of it. Was there an objective need for Cyberpunk 2077? It was a need that was given to them by marketing. The same way, a society can be given a need for positive art that will inspire them, impart them with values, awaken their interest for the eternal. It all comes down to the social system: socialism wants to instill those things, capitalism doesn't. Simply, the goals of the two social systems are different.
A ticket to the Bolshoi was 1 ruble in USSR, which was cheaper than 1 piece of bread. The state attempted to civilize the masses that were all illiterate farmers just two decades ago. For one or two generations, mostly born in the 50s and the whereabouts, they succeeded and produced some of the best minds of the century. Art played a very important role in the formation of those people.
I suppose the reason I'm schizophrenic about it is that I can never decide whether true art is fundamentally Schopenhauerian or Nietzschean - whether it's meant to give contemplative peace or to stir the blood. If the latter, then you are right: its function should be to represent to the people an ideal that they can collectively strive to create, and the State should police that. But if art is fundamentally contemplative and mystical, then you need that underground.
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It's interesting that we associate Soviet art with monumental "soviet realism." But that actually only took hold later on. Initially Soviet art promoted modernity and what we would call "degeneracy." Why that initial support and why was it withdrawn?
I'm not sure there was a support, so much as a lack of oversight.
Let's take painting as an example. All types of art have a rational reason for being, e.g. poetry was born by an objective need for rhyming, which helped memorize difficult and long texts. Painting's initial and rational goal was to portray things - there was simply no other way to do it. But then photography removed that objective need in the beginning of the 20th century. Painters became reactionary towards photography and needed to find a way for the art to evolve. Two ways emerged. 1. infuse paintings with socially-important content, and 2. a formal self-expression, which is a dead-end. All kinds of schizophrenics and charlatans went the second way.
The early soviet era was characterized by a certain amount of chaos and freedom to do anything. A lot of experimentation took place. The military had removed ranks even, trying something new. Suprematism and other modernist "art" was allowed to sneak in at that time, thankfully only for a few years.
Art is social, as its defining characteristic. As such, it must be socially useful. The meaningless, modernist self-expression in art is:
a) not interesting -- Someone will smear shit all over his face and say "this is me, this is my art." Who gives a fuck? This is not socially useful and hence a dead end.
b) contributes to degeneracy -- makes people stupid, atomizes society and makes it less prone to resist the elites. The guy smearing shit all over himself as "art" is the symbol of this violence by the elites: they make you literally "eat shit."
Furthermore
) - e.g. doing proper pixelated graphics was just as hard relatively speaking for developers then as doing full 3-d graphics is now. And it was always about a third to a half of developer effort, and apparently (from what I've read) that's stayed constant.
