Answers (1)
First of all, the roll of the government is to provide protection for the people. Not to go into business. Aside from that little known fact, there are several reasons.
The government has a seemingly endless supply of capital (money, which is taken from you and me in the form of taxes) that it is supposed to use for our protection. When they decide to take all of our money and pour it into a business, it would give them a grossly unfair advantage over all the other businesses that have limited capital. Result being everyone else goes out of business.
In case there might be one or two big companies out there that stay in business, the government can simply pass some law that will cripple the competition, and make themselves immune to said law- (which they usually are)
Once that particular industry is monopolized by the government, (putting hundreds or thousands of people out of work) they can do whatever they please with the cost of the product or service that industry provides, possibly wreaking havoc on the economy.
Plus, with all the competition out of the way, the quality of said product or service will suffer greatly~ and better quality will be extinct, along with the private sector business.
Bottom line, the private sector could never compete with an entity that has all the money, and makes all the rules. Try playing a game of Monopoly with your kid brother. Tell him he can have all the money he needs, and he can change the rules whenever he likes- while you follow all the rules, and pay your taxes to your brother. See who wins.