In the process, the public lost the benefit that less-profitable part provided. Besides ripping up a company that was doing fine as-is.

You call that "reallocating resources to more productive uses". Yes that may be what's happening in some cases. But not always.

Less-profitable != non-beneficial to the public. At this point I regard PE entities as value-extraction machines. Which sometimes, but rarely, work with the public's benefit in mind.

And let's not get started on cases where PE secured loans, sold off a company's assets, only to lease them right back. Leaving company deprived of their assets & debt-laden, going under shortly after, while PE firm runs off with the goodies. Most people would think of that as theft & destruction. But in high-finance world it's named differently & somehow legal.