You're right. I hadn't considered that it's such a boon to lenders. Tax (or deduction) incidence is an interesting rabbit hole. It almost makes tax law really interesting.
There's a thought piece that I come back to often. It's an episode on Planet Money called The No-Brainer Economic Platform. In it, six economists that span the political spectrum present six policy changes they'd make to the economy. Importantly, it's six policy ideas they all agree on. And first on that list? The MID. But the other ideas are great, too.
It's revealing that all of them are political non-starters.