>Private sector does some things better, see Rocket Lab, Blue Origin, SpaceX, et al.

All of those companies exist on the backbone of work that was done by government funded labs. You are just seeing the investments pay off.

PHds aren't engineers. The whole point of a PHd is basically spending a whole bunch of time working on something, with a very slight chance that it may or may not work - this is not something that is compatible with a private sector in any means. The point is that as a collective, you hope that someone has a brain blast moment and discover something that engineers can then take and make viable.