Generally true, but for some critical functions in society it's better to give up some competitive efficiency in favor of regulated stability/reliability. Law enforcement and defense are prime examples of things you REALLY don't want privatized. Also the NRC and FAA.

You can (and should) have a hybrid system wherever possible. In the case of the power grid management and oversight by the government, with commercial contracts for new equipment, MX, and operation of most equipment. You don't need a vast bloated government bureaucracy for ever aspect of that.