Governments don't know what has positive ROI... because they don't care about it. Private companies would go down if they do projects with negative ROI.
Tell me the incentives and I'll tell you the result.
we should prefer market based solutions when they work, and we should work on making markets applicable to as many problems as possible, and we should definitely keep an eye on the usual regulatory capture problems (revolving door, incumbents lobbying to keep competition out, etc..)
markets work when the playing field is clear and equal. (for example global trade works if the seas are clear of pirates, and when there are mechanisms to keep rate of counterfeiting low enough to have trust between consumers and producers.)
Every function that the government is doing, was done (better) at some point by private enterprises.
About levelling the playing field, the problem is regulation in general. Monopolies are only bad if they are supported by violence=governments (for example you could consider Google a monopoly but it's a market based one). You don't need a lot of competition, just remove all regulatory barriers to entry/exit (note: barriers to exit are also important).
Tell me the incentives and I'll tell you the result.