I worked for one of the first few web based services. West Law was the defacto then (2000/2001). They even sued us and claimed that page numbers used in citations were proprietary information.
To answer your question re: its origins being publicly funded, no. When there was no internet database to connect to people bought the books from a print publisher (either at huge maintenance cost or sparingly at the expense of not knowing what was current). The print publishers bore the cost and reaped the profits of consolidating all of this data.
To answer the next obvious question: yes, there are probably people in prison or not depending on whether a small town law library bought the updates from West Law in a timely fashion 20 years ago.
To answer your question re: its origins being publicly funded, no. When there was no internet database to connect to people bought the books from a print publisher (either at huge maintenance cost or sparingly at the expense of not knowing what was current). The print publishers bore the cost and reaped the profits of consolidating all of this data.
To answer the next obvious question: yes, there are probably people in prison or not depending on whether a small town law library bought the updates from West Law in a timely fashion 20 years ago.