Private companies are beholden to private interests. Government is beholden to the public at large. Sure, a private company could design the infrastructure behind the municipal water system, but are they going to design it and price it and service it in a way that serves everyone or are they going to design it so that they maximize profit even at the cost of, say, making it really hard for poor people to get running water? If Comcast ran the water system they'd make basic service very expensive for poor people, they'd constantly try to upcharge you (you'd pay the same price for hot and cold water taps as you would for the triple-play bundle of hot water, cold water, and carbonated water) and they'd return the profits back to the shareholders rather than investing them in improving their infrastructure.

If you're dissatisfied with the level of service you get from the police, imagine how things would look if there were no courts, no prison system, no laws and no police.