I remember that policy from the time of rampant privatization here in Europe. "Why should the government provide this service .." - well, a few years later we knew why.
It's also quite often the mentality of people that say "you know what? Our software sucks and the architecture is stupid, I will build a new, far better one!" ... yeah, that usually doesn't work either.
I saw a comment the other day which sums the problem with that attitude up quite nicely (paraphrased, cannot find it right now): "Without inside knowledge it's hard to distinguish stupidity from good engineering"
Going roughly by what I assume to be the GP's logic then, there should be a minefield surrounding discussions of having the government provide public services at all, since, naturally, that will lead to Soviet-style communism and the deaths of tens of millions.
I'd also be wary of ascribing to large-scale political sentiment (not even shared by all) the kind of purpose and wisdom involved in engineering decisions.
As you quoted "Without inside knowledge it's hard to distinguish stupidity from good engineering" - in this case, there is no inside knowledge.
[0] At least in theory. Failing to provide a promised service is not the same as deliberately providing no service. It might not even possible for a government worth the name to do literally nothing.