My impression (not well researched though) is that such prizes have served in the past to inspire many people to try to solve the problem, and they bring a ton of publicity to both the problem itself and to why the problem is difficult.
I'm not sure if the money would need to be held somewhere in the meantime, but if not then this seems like an extremely easy offer - if some person / group solves it then great they get the money and it's really well spent. If not, then the money gets spent on something else. If the money would need to be reserved and can't be spent in the meantime then this becomes a much more nuanced cost-benefit analysis, but I still think it might be worth considering.
Has this idea been discussed already? What are the counterarguments?
I think the OP is advocating a prize for solving the whole problem, not specific subproblems, which is a novel and interesting idea. Kind of like the $1M Millennium Prize Problems (presumably we should offer far more).
If you offer a prize for the final thing instead of an intermediate one people may also take more efficient paths to the goal than the one we're looking at. I see no downside to doing it, I mean you don't lose any money unless someone actually presents a real solution.