It is that but it's more than just that. When the Fed makes money, that money is sent to the US Treasury. When the Fed loses money, then it creates "negative assets" (something that can only exist when you have a money printer) which will be used to offset future Fed profits (and NOT send those profits to the Treasury).

By losing money now, the Fed not only deprives the Treasury of income now by losing money, but also deprives them of income later when the Fed is (presumably) making money again. This scheme is in essence taking money that would have been sent to the Treasury and instead funneling it to the banks.