For comparison and contrast, Komodo Dragon were once diplomatic gifts from Indonesia as well, and only held by Cincinnati and the National Zoo -- then the latter bred them, and now they have become common enough they have started showing up at some smaller, non-major facilities, and some major facilities have gone out of them with zero fanfare. The babies weren't required to go back to Indonesia and formed the backbone of a breeding program and captive population instead.
There's a large number of species that have been given as diplomatic gifts with no strings attached - as a proper gift should be. Sometimes it's enough to form a population, other times not. Many zoos started or were expanded on receiving diplomatic gifts of exotic animals; Jurong Bird Park's original collection was significantly comprised of diplomatic gifts iirc. As you note, Giant Pandas were originally in this category as well, but that has now turned into diplomatic loans. The overall difficulty in breeding pandas combined with their appeal was apparently an easy transition to charging for them. Now offspring of a loaned pair of animals are normally also considered as belonging to the owner of the adults - so China's panda loan is not out of the ordinary there given the terms. Yet nowadays there's numerous photos and videos online of Chinese facilities with over a dozen young pandas in a single frame, and breeding success to the point the Giant Panda was actually downgraded in threat status by both China's authorities and the IUCN. Yet China stands by the loan program and limits pandas outside China, fully controlling every panda and keeping 24 hour tabs on all of them.
Now it's certainly fair to make sure your diplomatic animals are going to reputable facilities that will care for them appropriately, but is a million dollar loan and 24 hour surveillance really necessary? Ultimately however, maintaining control of all offspring ensures that there never will be any possibility of challenges to the exclusive agreement. Nobody else has any pandas to offer, you take the loan or leave it. Personally, I'd rather see zoos shunt panda money to working with actual diplomatically gifted species or threatened species, instead of continuing to dump money into lazy bamboo bears. National remains committed however, which is not particularly unsurprising given politics - but I hope San Diego and Atlanta will consider putting their money elsewhere. Memphis seems uninterested after the PR hassle leading up to the departure of theirs, which is very likely in their best interest for now.