The collective action problem sounds good in theory, but the concept breaks down when you realize that the formation of a government (at least a democracy or republic) is also a collective action. The idea is that we can't form a market to efficiently create certain things like roads, but that somehow we can form a government which can efficiently create those things. Market failures, like the failure to produce a public good, are not defeated or circumvented by forming a government, because government is also a public good.

> It's rational for a private company to insert a road into a system to benefit itself at the disadvantage to others (cf. negative externalities). Indeed it's rational for several to do this making ad-hoc modifications to the network, the net result of this is significant inefficiency.

It's also rational for a government to insert a road into a system to benefit "itself" (i.e. politicians, construction companies that are "friendly" with government, etc.) at the disadvantage to others. What is your response to my environmental argument? That's an argument about specific negative externalities that are produced by government that I would not expect to be produced by private infrastructure.

> The moral question then arises: we have these single-points-of-trust, do we have any democratic control over them?

It's just as reasonable to ask that about government roads. Does government's decisions about roads reflect the desires of the population? I haven't seen any data, so I don't really know, but I would suspect the answer to be mostly no. But markets often do have the quality that their products reflect the desires of the population.