Agreed...sort of. The problem isn’t so much the nonprofit status, but that there is no separation of nonprofit and state. we would be better off without nonprofits. What little good some nonprofits do must be dwarfed by the evil done by the rest, but the big problem isn’t the untaxed proceeds, instead it seems to be that government gives money. They are charities in name, but in practice they are really extensions of the bureaucracy.
The money and power are so enormous charities that once performed important functions are taken over for greed and/or political power. I believe that's happened to Catholic Charities and Salvation Army and many others. I agree with most of what you've said...