Which was exactly my point, it has been used before and it was not always a total failure like you suggested. If the government did not turn them over to be run by corporations I doubt they would function very well. Roads, Bridges, Damns, are all made by government employees hired as contractors.
The Military was in the past an employee of last resort, not like today. Many a young man headed for a career in crime was turned around by the military experience.
Private vs Government doesn't always work out better for the consumer. Red light cameras and automated speed traps ran by corporations, yield very little back to the state compared to the cost to the consumer.
Not to mention the business that are actually controlled by the government through regulation.