I'm surprised to see so few mention a more direct ostensible 'fiduciary duty.' Going public, especially without share tiering aimed at letting the owners keep control, involves yielding control of your company to shareholders. And this often creates a conflict of interest. Shareholders, generally, are not holding shares because of any affinity for a company. They're holding shares because they think those shares will appreciate and give them more capital.

SpaceX is a great example. They don't want to go public simply because their longterm goal is not something that has an immediately apparent path to monetization. And on top of that it's also very high risk. Elon is driven by ideology which is, in my opinion, a great thing. But it's not something that would work well at a public company.

As another example take something like Steam - the primary PC gaming platform. In spite an effective platform monopoly, they've chosen to never 'squeeze' their position. And they're doing better than ever for it. On the other hand they could likely multiply their short to mid term revenue in exchange for killing themselves in the long run. When the owners of a company are more interested in increasing their net worth, than in creating a solid long term company - it creates a major conflict of interest.

In theory my argument should fall flat because of market efficiency. If making decisions so obviously hurts a company's longterm outlook, then that should theoretically be factored into the price of a stock. But in reality quarterlies seem to drive the market.