I think one problem is that most people confuse private ownership with "the market". Just because a utility company is owned and operated by a private entity does not mean it is influenced by market forces. Utilities fall under a natural or technological monopoly. Due to space constraints it is not desirable or efficient to have multiple companies run pipes, cables, or other infrastructure alongside each other to compete. There are no competitive forces; there is no market. Publicly run institutions or privately run+ publicly regulated institutions better serve the needs of the people in these conditions.

Sure, they do we're just not as far along the curve!

That said, who is to say the trend isn't reversible some day.

Also let's not forget the selling to private operators does provide benefits, not always, it's not the magic fix we pretend it is.

I can't speak for the parent post of course, but what I think they might mean is this: social democracy eventually devolves into neoliberalism (or worse), which, as you rightly point out, is geared towards making life much, much worse for the many to the benefit of a shrinking few.

To see some examples of this, look at the arguably social democratic Keynesian US from the fifties, and where they're at now. Similarly for the United Kingdom. Labour used to fight for social democratic policies, and since the advent of "New Labour" (Thatcher's greatest victory), they're essentially a right wing party. For a much more harrowing example, look at Allende in Chile and the US sponsored coup by Pinochet.

In general what you see is that the social democratic status of a state is an unstable one. Roughly speaking, the people who would benefit from neoliberal policies happen to have a lot of money with which they can and do influence politics. There's campaign funds, lobbying, but much more importantly owning the media[1]. Propaganda is incredibly powerful (we are not immune), and it has been used successfully time and again to get people to vote against their own interests, such as abolishing social democratic practices.

[1] In the case of Chile, and for example Indonesia, the mechanism is much more violent, but the principle the same. Capital is spent to successfully influence politics in favor of capital.

Neoliberalism fails because of what economists call "the theory of the second best". Neoliberalism fundamentally assumes that the best practical system is as close as possible to an ideal free market, but it's not, due to local minima (often ones we've already found!) often being better.

The best system is a free market, if possible. But the second best system may not be close to the best system, it may be a local minima that is very different.

A classic example is that small companies and no unions is theoretically best, but monopoly unions vs monopoly companies is the second best (since there's no single monopoly, so they negotiate something close to the theoretical ideal).

Free markets are best, but if the government is going to heavily subsidise and regulate the power companies (as they are natural monoplolies, so they either get regulated or they abuse their position) then maybe it's best to just cut out the middle man.

They’ve really only existed since the end of WWII and were rescued from that war by the U S so not really enough time to judge.