> We really have a societal problem in that we allow private entities to do things we don’t allow government to do.

Thats basically the foundational idealogy of the united states. Thats not the issue.

The real issue is your next sentence. The government can just loophole around their intentional limitations by paying private companies to work on their behalf.

It's a loophole, but it's willful by design on the government's part. The book "Means of Control" by Byron Tau covers this in great depth.

It's so much worse than even those of us who are moderately interested in mass surveillance know.

The only private companies with this power are monopolies. Effective competition would destroy this behavior. So the real problem is the government _intentionally_ and _illegally_ allows monopolies to form so they can get access to this workaround.