Lyman is simply saying that in the government's mind the Vietnam war had finished and they wanted nothing more to do with it. That included, it seems, having to deal with the many psychologically damaged veterans that had come back to the country. As Lyman continues to say, for his brother, the war "would keep on going."
When Henry returns after three years in Vietnam, he is unrecognizable from his former lively, humorous self. All he does is sit in front of the TV. One time he is so engrossed in a program that he doesn't notice that he has bitten all the way through his lip.
Towards the end of the story, Lyman and Henry go on a road trip where Henry finally begins to open up. Lyman starts to think he has his old brother back, but it proves a false dawn. The story ends with Henry jumping into a river and disappearing.