The $6 million is over several years, and there's another game similar to The Sims coming out later.
The money does come from recruiting. I think it's great; how much does the army spend on a couple super bowl commercials, or on movie assistance such as Blackhawk Down? For the same amount of money they get continuous favorable exposure in their target demographic. AA could well wind up dominating the FPS market. I'm getting advertised to, and it's fun!
There are a lot of other possible applications of game engines in the military, btw. The development is being done by a research organization in the Navy that concentrates on modeling and simulation. Current game engines blow away many military simulators, particularly in graphics and level construction. It's not hard to imagine constructing a game level for, say, all the US embassies, so anti-terrorist troops can do practice takedowns of places they've never been.