> Having corporations limits the blast radius of what malicious/incompetent employees can do

Only if the state cares to reign them in. If it doesn't, or joins up in cahoots with them...

For example, the Cuyaml Fruit Company's private army staging a coup d'etat against Honduras.

Or the Iraq Petroleum Company assisting the Sultan of Muscat's invasion of Oman because of the bountiful hydrocarbons in the area.

Or the Union Carbide India Limited pesticide plant in Bhopal accidentally poisoning 500,000 people.