While I agree with you completely, the argument for a counter-point would be that exactly because the private company should create as much profit for the owners as possible - it has to be as lean / efficient as possible.

That is not true for "the goverment" as profit is not an encentive to rationalize the work process.

What I find interesting are goverment agencies that operate on both levels. A great example is Ordenance Survey in UK. While they provide a public service, they also sell some of their products commercially to cover some operating costs (hiking maps etc.).