That point did occur to me; with the cost of roads covered by through private transactions the government in question would simply scoop up the same taxes and spend them on something else. The real challenge is getting people to understand that 'efficiency' doesn't only mean a few extra dollars left in some project's budget; it means that the achievements of private business could not and can not be replicated by government. That if the government had control of electronics, we probably wouldn't have smartphones now. That a systemic lack of efficiency means that everything is less than it should be by some unknown percentage, be it the MPG of your car, the speed of your internet, the stability of your buildings, your very life expectancy. That is the difference that, somehow, needs to be communicated.
Brainstorming is the right approach; whatever the problems of a free community are, many of them will have wildly creative solutions (the rest will be reassuringly simple. Need sewer? Dig ditch, lay pipe, cover with dirt, flush with confidence). Consider the last video in the first post; the solution to the man-in-the-middle problem was the concept of a 'certificate signing authority', a concept so abstract that the presenters had no idea how to describe it, before jokingly drawing a picture of 'the internet factory'. How could anyone not up to their knees in tech know-how, and even plenty of them that are, predict that the solution would be "change your message so that's it's completely readable after you send it and after your intended recipient gets it, but not in between. Because maths."
I'm also a bit buoyed by the fact that the system works on trust. What about the company that betrayed that trust? They went bankrupt, because no-one trusts them anymore