The model you are talking about is terribly easy for anyone with a sufficient lust for power to control. You see it all the time in Africa and the Middle East. Warlords gain a bit of power and start taking over territory and eventually build a small army. With said army, you take over transportation or simply rape and pillage.
Even without physical violence, economic control is equally possible with a sufficient monopoly (which, with no regulatory system to prevent dumping, tying, etc., isn't that hard to build). Control shipping, an important bridge, a major highway, waste disposal, etc. and you can effectively blackmail any of your neighbors' "sovereign" lands.
The big question is would it have worked? Was the fledgling country so republic-loving that it would have overcame a despotic Washington?
In other words, how robust is freedom when the general populace really wants it (and has somewhat of the means to back it up)?
That's what the difference between a government and a business is. They are otherwise the same.
I don't see how this is a necessary requirement of government. Instead of answering you directly, I'd suggest reading this: http://www.amazon.com/The-Origins-Political-Order-Revolution...
I simply said it was harder.
A government has a much harder time being exploitative than a business does. To the extent that a government's personnel are involved in businesses, the government is corrupted and its resistance to exploitative desires will break down.