PE is a very broad practice. It's kinda hard to make a single-blanket argument for it (it's like asking "Is Software good for society?" Yes, maybe?).

So here are some positive things that I think PE funds can contribute:

1) Private equity serves as an exit path for small business builders. Suppose that you have built a small, profitable trucking company. Now you are old and want to retire. You kids have no interest in the business, and have already built different careers elsewhere than managing a fleet of Super Greats. Oftentimes, PE funds are only realistic buyers of your business.

2) At a more subtle level, PE can supply better management. For example, a supermarket owner I know accepted capital from a PE fund specifically to acquire better talent (his remark: "very talented people are rarely excited to operate a rural food & beverage shop").

3) PE-backed companies are, arguably, structurally better than the public counterparts. The cliche is that many public firms are run like third-world fiefdoms (the board are focused on empire building; the executives are spending money lavishly on perks). Most of these concerns vanish once each director are given a shared, transparent objective set by the deal structure. (As Henry Kravis often remarks, PE is mostly about alignment of the interests)