Like anything, there has to be a balance. And truth be told, fire protection is a very good example of where it is needed as a government provided entity in some cases, or as a private entity in other cases. Normally, it should be government provided and taxed appropriately. But there are situations where:
1. The government option doesn't exist, like for people who live in the middle of nowhere where there is no municipal fire department and no fire district, so private contract is really all there is option-wise. And even it should be regulated in some way so as to not be out of control cost-wise, and be reasonable.
2. Where it's cheaper to contract out a portion of formerly government-provided service, in current cases airport ARFF/CFR, that is far less utilized than the rest of the department, freeing up money to be used where it's more needed, while still maintaining contractual standards of service through oversight of the contractor.
This is an area where goverment and private-sector can co-exist, depending on the particular circumstances.
On ARFF services, many municipal departments are looking to save their limited money and apportion it to areas of the department that get far more use. Paying a flat fee and enforcing contractural standards for a segment of their department that is rarely used, is effective. Is it perfect? No. But nothing is.
For those wondering, a number of airports use contract CFR/ARFF services, and its been successful:
Will Rogers World, OK;
Chennault International (Lake Charles) airport, LA;
Cape Canaveral AFS
NASA Ames Research Center
NASA Kennedy Research Center
Roanoke, VA;
Rockford Ill;
Trenton, NJ
Burbank, Ca
Jackson County, OR
Alexandria, LA
Memphis, TN (Fedex ramp)
there's more, but those are just off the top of my head