Removing the incentive to make profit does not create incentives to improve efficiency and service. The government has no such incentives.
I'm going to go out on a limb here, and guess you've never used the for-profit rail services of the UK then.
(I know this is quite snarky, but to elaborate, there is no incentive for the TOCs, because a operating a stretch of railway line doesn't have any competition. You don't need to be efficient or give good service because customers do not have an alternative choice of train they can use.)
It all moves in cycles, I could well imagine the same situation happening again in 20 years.