That's gotta be about the least justifiable statement in political-economic commentating history.
2. Markets that state and local governments dominate are large. Do you really think Waste Management would hesitate to take new markets that were previously controlled via government contract? Or that private prisons wouldn't purchase and run ones that were previously state-controlled? Or that power and water companies wouldn't realize the incredible opportunity to expand into new areas that were previously monopolized through government interference?
Your example of waste, power, and water are a few cases where people, I think, support the government granted monopoly status. These industries have huge fixed costs and generate large externalities. Reliable waste management is a communal concern with clear risks to public health. I'd rather not have the trash company decide my neighborhood is too far to service weekly and switches to monthly pickup.
Government exists as a function of the people to balance externalities. Does it go to far sometimes? Sure. But when people are actively engaged though government can be a force for good.