There is an increasing tendency to interpret these things in false dichotomies, I've found. If you criticise libertarians you must be a socialist and vice versa. I had a similarly frustrating encounter the other day, where my critique of the interaction between capitalism and democracy in the US was constantly construed as some sort of glorification of socialism, even when I never mentioned it. My patience for this type of thinking is worn pretty thin these days.
My view is simply this: there are numerous different consensus methods in our society. Democracy, academia, courts, markets, bureaucracy, technocracy, and hierarchical command structures. They all have strengths and weaknesses for different problems on which a consensus must be reached. But democracy sits above all these and plays the important role of slowly figuring out where these should be applied and how they should be weighted. This is a very hard problem, no ideology has a self-contained solution. Democracy must be an evolutionary process. The ideas that work stick around after a change of power, and the ones that don't go away, ideally.
Based on this it's crucial for democracy and therefore the government to have some measure of regulatory power over all of these. This is where libertarianism really breaks down. It's far too corrosive to the usefulness of democracy, which is the only thing keeping everything together in the end.