No one has been arguing that NASA scientists are better than private sector scientists. The argument is that having a seemingly-stupid goal that takes a lot of work can spawn off legitimately useful technologies that would never have been targeted by the private sector because moonshots aren't good investments. The theory is that it's a good way to very quickly iterate through many different ideas.
This is just my opinion, but I feel like stuff is way more likely to be actually be accomplished if there's a tangible goal. A goal, even an arbitrary one, helps you actually figure out the limitations of a theory or design, and if you don't have a goal it is far too tempting to handwave away important questions and live in theoretical land.
It does sadden me that these days their designs are much more restricted, as I enjoyed the wacky ideas we would occasionally see when the rules were less restrictive.
Even in weird ways: my sister can afford to pay her rent/food herself while studying because she prepare meal plans for a water polo team, which helps her study and find ideas for her college projects. Hopefully she can get through her studies without working in a kitchen again.
The Apollo missions flew on Rockets designed and Manufactured by Boeing (S-IC), North American (S-II), and Douglas (S-IVB).
The lunar lander was designed and manufactured by Grumman.
That said, a lot of engineering goes into setting good purchasing requirements and assessing the results.