What industries, if any, are best when nationalized/government-run?

In free-market economics, private firms are said to be more efficient and better for consumers as competition between private firms in an industry breeds innovation, low cost (for consumers), and higher quality as they seek to capture profits from consumers. However, there are some industries where competition cannot exist do to the fundamental nature of the industry.

Here is an example:

If we have a private firm that ran a city’s water system (i.e. distribution and purification), you would have to have a monopoly because it would be infeasible for consumers to experience any competition since entry costs are large for new competitors. A competitor would have a difficult time trying to re-pipe the entire city for to compete with the established company. They’d not only be fighting off the competitor, but also anger by the locals for the disruption caused by the huge amounts of construction.

For something as essential as the water supply for a city ran by a monopoly, it would necessarily be heavily regulated by the government since market forces do not motivate the firm to innovate, produce higher quality products/services, or lower costs for consumers. Also, with an industry like the water supply for a city, the health of consumers is extremely important. By virtue of these circumstances, the government already mostly controls the private firm’s operations anyway while still being an expense to the government (consumers overall through taxes) to make sure that the firm is complying with regulations and standards.

At this point, you have an entity with a monopoly over a service, controlled and inspected by the government, and new competitors cannot enter the industry (at least locally). This entity becomes no longer concerned with innovation and quality but rather increasing profits which all private firms seek to do anyway. This is because there is no need to do so since the firm is guaranteed its revenue and consumer base. But without the constraint of an open market and competition, this leads to even worse outcome for consumers since the entity will try to do the bare minimum required to create a larger margin by cutting costs leading to lower quality and unnecessarily higher costs for consumers.

At this point, you might as well have the government run the industry where it can be held accountable by the people (in a democracy). I mean, why charge the consumers a higher cost to produce profits for the private firm when that is completely unnecessary, and is basically operated by the government? What does the private firm present to consumers that would justify them receiving profits?

Here is my question: Is my line of thinking wrong? If yes, why? And if not, are there any other industry where it would be best for the government to run them?