Seems harsh actually.
I'm sure it would work great for a small community of up to a couple of hundred carefully selected individuals, but I think anyone who thinks it would work for general society is a bit blinded by their ideology.
In the end, the only forms of Government that have worked at scale have centralised governance, and democratic Governments seem to be the least-worst workable systems.
Often times, they are improved by working outside the system itself, it seems. So there are some interesting options for tackling this hard problem. The company mentioned in the article may turn out to be a great example of this.
Governments do come in many forms, with varying size, composition, and effectiveness. However, the ancap vision of no government and everything done by "voluntary" contract has no meaningful basis in reality at this point, as far as I can tell.
But that doesn't mean you couldn't a) pare back the state to the bare minimum functionality (which doesn't include garbage collection, IMO) and fund it voluntarily.
You could do that with the entity called “the state”, but that entity would no longer be the state or government, no matter what it was called. (It might be an arm of the real government, which might consist of entities voluntarily funding the “state” which themselves exercise coercive, in practice, extraction of wealth, or it might be an irrelevant figurehead.)
What about tribal societies?
Basically, this is just setting up a giant tragedy-of-the-commons situation.
You could even argue that such an arrangement is voluntary in a narrow definition of a term. Definitely not one to satisfy most libertarians/anarcho-capitalists, but good enough for us to say we're not living in a state where we have absolutely no power over the state's spending.
Wouldn't a savvy gamesman just vote for their own self-interest?
The idea is that it's more "expressive" than one person = one vote. And it's more manageable than pure direct-democracy. Look, you could fiddle with things and have "minimum" amounts so that people can't completely break a government feature if they don't like it. E.g. 100% of people voting to have 0 military spending. But, if that were to happen, is that not a hint to politicians that none of the voting populace wants military spending?
To me it's another way to give more power to the individuals, rather than leaving it solely in the grasp of politicians.
In the US (a democratic republic), I see that the decision makers act in their own short term self-interest.
The risk with an enlightened despot (think typical corporate structure) is that the person at the top can really cause damage, because they don't have checks on what they can do. We can imagine the downside right now -- the strength of the republic is currently being stress tested to see if it can salvage itself simply by resistance, friction, and inefficiency to prevent Mr. Trump from destroying so much.
Sorry for being grumpy, but this is as useful a contribution as "Wouldn't it be better if we harnessed the power of house-elves to magic away our trash?"
To extend your analogy: "The magic house-elves are already making our cars, writing our software, and growing our food. I wonder if we should pay them a bit more to cart away our trash too."
The house-elves shouldn't be doing the law enforcement or the Government (and in fact they _are_ right now, e.g. in the case of for-profit prisons and the Fed, and it's a disaster). But they're a bit under-utilised right now in some areas :)